HONG KONG, May 7 /CNW/ - PACRIM INTERNATIONAL CAPITAL INC. (PCN: TSX) ("Pacrim") holds 46% of the outstanding common shares of Pacrim International Capital Holdings Inc., a holding company with business interests in the People's Republic of China consisting of an indirect 75.07% interest in Wah Sang Paper Products (Shenzhen) Co. Ltd. ("Wah Sang"), a corrugated packaging company. Pacrim is pleased to announce that Wah Sang, through its wholly owned subsidiary Hong Kong Wah Sang Industrial Co. Ltd., has acquired a 51% interest in Protech & Hi-Pack Pulp Mould Development Ltd. ("Protech") of Hong Kong for HK$30,000,000. Protech is primarily engaged in manufacturing pulp mould packaging products and is a vertical integration acquisition for Wah Sang.
The Share Sale Agreement provides that if the net profit of Protech for the year ending March 31, 2011 is less than HK$6,000,000, the purchase price shall be reduced by ten times the amount of the deficiency. If the net profit of Protech for such year is greater than HK$6,000,000, the purchase price shall be increased by ten times the amount of the excess. While Protech is not currently profitable, Wah Sang intends to assist Protech in significantly reducing Protech's raw material costs and in soliciting orders for Protech from Wah Sang's customer base.
The vendor holds a remaining 34% interest in Protech and has the right to convert such interest in certain circumstances into shares of Wah Sang based on the then relative net asset values of Protech and Wah Sang.
On May 6, 2010, the Bank of Canada noon exchange rate was HK$1.00 = Cdn$0.1343.
The corrugated packaging operations of Wah Sang are located in Shenzhen, in the Pearl River Delta of southern China which houses one of the world's largest concentrations of manufacturing of consumer electronics, office and telecommunication equipment. Wah Sang sells its high-end packaging products almost exclusively to multinational corporations which export from China. Wah Sang has annual production capacity of 63,000 tonnes of containerboard, 50,000 tonnes of flexo containers and 20,000 tonnes of off-set colour containers. The bulk of the containerboard produced is used internally for further processing into flexo containers or off-set colour containers. A description of Wah Sang is contained in Pacrim's Annual Information Form of September 28, 2009.
About Pacrim International Capital Inc.
Pacrim International Capital Inc. ("Pacrim") is an investment holding company with its investments focused mostly in southern China. Pacrim's business strategy is to concentrate on the corrugated paper products and packaging industry in the Pearl River Delta area of southern China, the heart of the "World's Factory". The company's head office is in Hong Kong with offices in Shenzhen, Guangzhou and Beijing. An intended strategy of Pacrim is to acquire selected small or medium size enterprises in China and to merge them for better operational efficiency. Like many industries in a developing economy, China's corrugation sector is comprised of mostly SMEs, some of which are weakened by the recent international financial crises, and may therefore be available to be taken over.
Caution concerning forward-looking statements
Statements made in this news release, other than those concerning historical financial information, should be considered forward-looking and subject to various risks and uncertainties. Some forward-looking statements may be identified by words like "may", "will", "anticipate", "estimate", "expect", "intend" or "continue" or the negative thereof or similar variations. Readers are cautioned not to place undue reliance on such statements, as actual results may differ materially from those expressed or implied in such statements. Factors that could cause results to vary include, but are not limited to: risks associated with China including state ownership, government sector intervention, foreign investment, repatriation of profit and currency conversion, tax, the developing legal system, protection of intellectual property rights, shareholder rights and enforcement of judgments, permits and business licenses, appropriation, political stability considerations, the central planned economy, fluctuations in foreign exchange rates and Chinese accounting and auditing standards; risks in business and operations including risks associated with expansion, future capital requirements, dependence on key personnel, environmental regulation, competition, risk in purchasing abroad, risk of change in the price of raw materials, product price volatility, insurance and operating plant risk; customer risk including risk of a single market and risk depending on major customers; technical risk including risk in the advance of technology and risk of relying on technology abroad; financial risk including foreign exchange risk, credit risk, liquidity risk, cash flow and fair value interest rate risk; investment strategy risk; and short term management transition risk.
We caution that the foregoing list of factors is not exhaustive and that when reviewing our forward-looking statements, investors and others should refer to the "Risk Factors" section of Pacrim's Annual Information Form, the "Risks and Uncertainties" and other sections of our Management's Discussion and Analysis and our other periodic filings with Canadian securities regulatory authorities. All forward-looking statements presented herein should be considered in conjunction with such filings. Except as required by Canadian securities law, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time-to-time by us or on our behalf; such statements speak only as of the date made.
SOURCE PACRIM INTERNATIONAL CAPITAL INC.
For further information: For further information: Guy Lam, Chief Executive Officer, Pacrim International Capital Inc., Tel. 852.2526.1554