Cathay Merchant Group Inc. Completes China Trading Platform
01 Julho 2005 - 9:30AM
PR Newswire (US)
Cathay Merchant Group Inc. Completes China Trading Platform
SHANGHAI, P. R. China, July 1 /PRNewswire-FirstCall/ -- Cathay
Merchant Group Inc. (AMEX:CMQ), is pleased to announce today that
it has established a trading platform for the export of aluminum
products for Chinese companies. This platform is completed with the
acquisition of two aluminum rolling mills that have an aggregated
current production of 32,000 metric tonnes of finished goods.
Projected combined sales from these mills for the calendar year
2005, exclusive of trading revenues, are estimated at euro 63
million with estimated earnings before interest and taxes of euro
2.5 million.* Estimated earnings before interest and taxes
("Estimated EBIT") is computed by adding the estimated interest
charge and income tax to the estimated net income. Management uses
projected combined sales and Estimated EBIT as a measurement of its
own operating results. Management considers them to be a meaningful
supplement to net income as a performance measure primarily because
taxes and interest varies widely from company to company. Estimated
EBIT do not reflect the impact of a number of items that affect net
income, including financing costs. Estimated EBIT are not a measure
of financial performance under GAAP, and should not be considered
as an alternative to net income as a measure of performance, nor as
an alternative to net cash from operating activities as a measure
of liquidity. Projected combined sales and Estimated EBIT have
significant limitations as an analytical tool, and should not be
considered in isolation, or as a analysis of our results as
reported under GAAP. The aggregated purchase price for the mills
was euro 15.3 million, subject to certain adjustments, and is
payable by way of euro 8 million in cash and euro 7.3 million of
unsecured notes. The notes are due in 2008 and bear simple interest
of 4.2%. One of the mills being acquired is owned by one of our
shareholders and our merchant bank, MFC Bancorp Ltd. An independent
evaluation will be undertaken to confirm that the purchase price is
fair. Michael Smith, President of Cathay Merchant Group Inc.,
commented "This acquisition both expands our operations in China
and allows access to the European market as a distribution source
for Chinese products. As well, it allows the company to utilize
technical expertise from the existing mills to assist in
integrating and growing our trading platform." Statements in this
news release which are not purely historical, are forward-looking
statements as defined by the Private Securities Litigation Reform
Act of 1995, including any statements regarding beliefs, plans,
expectations or intentions regarding the future. Forward-looking
statements in this news release are marked with an asterisk (*).
Management cautions that forward-looking statements are not
guarantees and that actual results could differ materially from
those expressed or implied in the forward-looking statements.
Important factors that could cause the actual results of operations
or financial condition of the Company to differ include, but are
not necessarily limited to, the risks and uncertainties discussed
in the Company's most recent annual report on Form 10-KSB and other
documents filed by the Company with the Securities and Exchange
Commission. In addition, our estimate of sales and earnings from
the two aluminum rolling mills is subject to continued demand for
the finished goods at expected levels, and to an uninterrupted
supply of aluminum stock at current prices, neither of which can be
assured. Revenues may be significantly affected by changes in
prices for aluminum. The prices for commodity can fluctuate widely
as a result of various factors beyond our control such as supply
and demand, exchange rates, inflation, changes in global economics,
and political, social and other factors. For more information
please contact: Cathay Merchant Group, Inc., North American
Corporate Relations Telephone: 604-408-8538 Facsimile: 604-683-3205
DATASOURCE: Cathay Merchant Group Inc. CONTACT: Cathay Merchant
Group, Inc., North American Corporate Relations, +1-604-408-8538,
fax +1-604-683-3205
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