/NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION
IN THE UNITED STATES/
VANCOUVER, April 13 /CNW/ - Hanwei Energy Services Corp. ("Hanwei" or the
"Company") is pleased to report that it has completed the private placement of
13,953,500 common shares in the capital of the Company (the "Shares") at
$2.15 per Share (the "Offering"), previously announced on April 2, 2007.
The private placement closed in escrow on April 2, 2007, with the gross
proceeds from the sale of Shares to be held in escrow and released to the
Company, together with accrued interest, concurrent with the issuance of the
Shares, provided that the audited financial statements of the Company for the
year ended December 31, 2006 to be made available on or before April 30, 2007
show sales of not less than $22.5 million and net income of not less than
$3.25 million (after giving effect to the non-controlling interest in the
Company) (the "Financial Targets").
As announced earlier today the Company reported its financial results for
the year ended December 31, 2006 and exceeded the Financial Targets.
Accordingly, the gross proceeds, together with accrued interest, have been
released from escrow and the Shares have been issued.
Hanwei plans to use the net proceeds of the private placement of
approximately $27.7 million to fund the growth of its business as set out
Use of Proceeds Amount
Capital expenditures (1) 9,260,000
Repayment of debt(2) 2,440,000
Working capital (3) 16,000,000
Total $ 27,700,000
(1) Capital expenditures will include $6,100,000 for establishment of a
production plant for high pressure FRP pipe for the oil industry in
Tianjin with an initial capacity of approximately 700 - 800 km per annum,
$3,000,000 to purchase testing and production equipment and to build
supporting infrastructure at the Daqing plant to complete the expansion
of production capacity to 2,200 - 2,400 km per annum and $160,000 to
purchase equipment for the production of spray headers in the Beijing
(2) Approximately $2,440,000 will be used to repay the balance of loans
due to Daqing Innovation Plaza Co. Ltd. and Zhutian Composite Materials
Co., Ltd., a related party.
(3) Approximately $9,400,000 of the proceeds allocated to working capital
will be used to fund inventories and receivables to support the expected
growth of sales, and the balance will be reserved for potential expansion
into the Asian region and other markets, and into FRP products for wind
Additional information is available on SEDAR and may be accessed at
THE TSX VENTURE EXCHANGE HAS NEITHER APPROVED NOR DISAPPROVED THE
CONTENTS OF THIS NEWS RELEASE.
This news release does not constitute an offer to sell or a solicitation
of an offer to buy any securities of Hanwei Energy Services Corp. in the
United States. The securities have not been and will not be registered under
the United States Securities Act of 1933, as amended, or any state securities
laws and may not be offered or sold within the United States or to U.S.
persons unless registered under the United States Securities Act of 1933 and
applicable state securities laws, or an exemption from such registration is
available. Any public offering of securities in the United States must be made
by means of a prospectus that contains detailed information about the Company
and its management, as well as financial statements.
FORWARD LOOKING INFORMATION AND NON-GAAP MEASURES
Certain information in this news release is forward-looking within the
meaning of certain securities laws, and is subject to important risks,
uncertainties and assumptions. This forward-looking information includes,
among other things, information with respect to management's estimates of
capital requirements, as well as information with respect to the Company's
beliefs, plans, expectations, anticipations, estimates and intentions. The
words "may", "could", "should", "would", "suspect", "outlook", "believe",
"anticipate", "estimate", "expect", "intend", "plan", "target" and similar
words and expressions are used to identify forward-looking information. The
forward-looking information in this news release describes the Company's
expectations as of April 13, 2007.
The results or events anticipated or predicted in such forward-looking
information may differ materially from actual results or events. Material
factors which could cause actual results or events to differ materially from a
conclusion, forecast or projection in such forward-looking information
include, among others: general economic factors, adverse industry events, its
ability to make and integrate acquisitions, industry and government
regulation, risks associated with integrating new production lines, risks
associated with entering new product lines and markets, risks associated with
establishing new production facilities and the potential for costs over-runs
or delays associated with construction, risk that the Company may be unable to
procure needed capital for its growth plans, and risk that the Company may not
be able to obtain licenses for technology needed for its expansion plans on
terms that are acceptable to the Company.
The Company cautions that the foregoing list of material factors is not
exhaustive. When relying on the Company's forward-looking information to make
decisions, investors and others should carefully consider the foregoing
factors and other uncertainties and potential events. The Company has assumed
a certain progression, which may not be realized. It has also assumed that the
material factors referred to in the previous paragraph will not cause such
forward-looking information to differ materially from actual results or
events. However, the list of these factors is not exhaustive and is subject to
change and there can be no assurance that such assumptions will reflect the
actual outcome of such items or factors. For additional information with
respect to certain of these and other factors, refer to the risks and
uncertainties section of the Company's Filing Statement dated November 23,
2006 and its Material Change Report dated March 7, 2007, both filed with
Canadian securities regulators, which is available on SEDAR at www.sedar.com.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS
THE EXPECTATIONS OF THE COMPANY AS OF APRIL 13, 2007 AND, ACCORDINGLY, IS
SUBJECT TO CHANGE AFTER SUCH DATE. HOWEVER, THE COMPANY EXPRESSLY DISCLAIMS
ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING
INFORMATION, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR
OTHERWISE, EXCEPT AS REQUIRED BY APPLICABLE LAW.
For further information:
For further information: Kim Oishi, Chief Financial Officer, (416)