China GrenTech Divests Network Coverage Module Manufacturing Subsidiaries
January 05 2009 - 8:00AM
PR Newswire (US)
SHENZHEN, China, Jan. 5 /PRNewswire-Asia-FirstCall/ -- China
GrenTech Corporation Limited (Nasdaq: GRRF; the "Company" or "China
GrenTech") announced that it has divested two wholly-owned
subsidiaries: Quanzhou Lake Communication Company Limited ("Lake
Communication") and Quanzhou Lake Microwave Company Limited ("Lake
Microwave"). The Company sold Lake Communication to Mr. Haifan
Zhuang, son of Mr. Kunjie Zhuang who is director and chief
technology officer of China GrenTech and one of the Company's major
shareholders, and sold Lake Microwave to Mr. Haifan Zhuang and Lake
(HK) Technology Company Limited, an affiliated company of Mr.
Kunjie Zhuang. The principle business of Lake Communication has
been to supply RF modules to the Company's wholly-owned subsidiary,
Shenzhen GrenTech Company Limited ("Shenzhen GrenTech"), for
manufacturing network coverage equipment, and the principle
business of Lake Microwave has been to supply RF modules to
companies other than Shenzhen GrenTech. As consideration for the
acquisition, Shenzhen GrenTech is released from its account payable
obligations in the aggregate amount of RMB106.3 million due to the
two subsidiaries and the buyers will acquire the two subsidiaries
subject to their existing outstanding debt obligations. The terms
of the transaction were negotiated on an arms' length basis and
approved by the Company's independent directors. The transfer of
the equity interest in Lake Communication has recently been
completed, and the Company is in the process of completing the
applicable PRC registration requirements for the transfer of the
equity interest in Lake Microwave, which is expected to be
completed in the first half of 2009. Mr. Yingjie Gao, Chairman of
China GrenTech, said, "Our plant in Shenzhen, which is operated
separately from Lake Communication and Lake Microwave, has mastered
manufacturing capabilities for all types of RF modules, which has
been a benefit to our fast growing RF business over the past two
years. The disposal of Lake Communication and Lake Microwave will
allow us to streamline our management structure, reducing
management expenses and increasing operational efficiency. More
importantly, as a result of this transaction, an account payable
from Shenzhen GrenTech to the two subsidiaries has been cancelled
and the buyers will assume Lake Communication's and Lake
Microwave's debt obligations, which will help to reduce our future
cash outflow in light of the current economic slowdown. As we
intend to continue to procure modules from Lake Communication and
Lake Microwave in the short term after the disposal, we anticipate
that there will be no impact on our operations or supply. Moving
forward, we will further leverage our leading RF technology and
production scale in Shenzhen to continue to manufacture our own RF
modules for network coverage." Safe Harbor Statement under the
Private Securities Litigation Reform Act of 1995 Statements
contained in this press release that are not historical facts are
forward-looking statements, as that term is defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements, including financial projections and forecasts, involve
risks and uncertainties that could cause the Company's actual
results to differ materially from its current expectations. Factors
that could cause the Company's results to differ materially from
those set forth in these forward-looking statements include: the
risk that the Company will not be able to produce sufficient
quantities of RF modules for its network coverage equipment
manufacturing or be able to source them from Lake Communication or
Lake Microwave on commercially acceptable terms or at all; the
Company's ability to reduce its management expenses and increase
operational efficiency as a result of these divestitures; the risk
that the Company will not be able to maintain its leading RF
technology and production scale to continue to manufacture its own
RF modules for network coverage; the Company's ability to maintain
its financial position and margins during the current economic
slowdown in China and worldwide; fierce competition in the wireless
communication industry; uncertainty as to its ability to
continuously develop and manufacture new RF technologies and keep
up with changes in RF technologies; risks associated with possible
defects and errors in its wireless coverage products or RF
products; uncertainty as to the Company's ability to protect and
enforce its intellectual property rights; and uncertainty as to the
Company's ability to attract and retain qualified executives and
personnel, particularly in its research and development department.
Other factors that may causes the Company's actual results to
differ from those set forth in the forward-looking statements
contained in this press release and that may affect its prospects
in general are described in the Company's filings with the
Securities and Exchange Commission, including its Registration
Statement on Form F-1 related to its initial public offering and
its annual reports on Form 20-F. The Company undertakes no
obligation to update or revise forward-looking statements to
reflect subsequent events or changed assumptions or circumstances.
About China GrenTech China GrenTech is a leading developer of radio
frequency ("RF") technology product developer and a leading
wireless coverage product and services provider in China. The
Company uses RF technology to develop and manufacture wireless
coverage products, which enable telecommunication operators to
expand the reach of their wireless communication networks both
indoors and outdoors, including buildings, highways, railways,
tunnels and remote regions. China GrenTech provides wireless
coverage services, including the design, installation and warranty
services for its coverage products. Based on its in-house RF
technology platform, the Company also develops and produces base
station RF modules sold to base station manufacturers. China
GrenTech is a qualified supplier of RF modules to several major
base station manufacturers and the major supplier of RF modules for
Huawei Technologies and ZTE Corporation. For more information,
please visit http://www.grentech.com.cn/ . For more information,
please contact: Investor Contact: Kent Lo, IR Manager China
GrenTech Corp Ltd. Tel: +86-755-2650-3007 Email: Investor Relations
(US): Delia Cannan Taylor Rafferty Tel: +1-212-889-4350 Email:
Investor Relations (HK): Ruby Yim Taylor Rafferty Tel:
+852-3196-3712 Email: Media Contact: Jason Marshall Taylor Rafferty
Tel: +1-212-889-4350 Email: DATASOURCE: China GrenTech Corporation
Limited CONTACT: Investor Contact: Kent Lo, IR Manager, China
GrenTech Corp Ltd. at +86-755-2650-3007 or ; or Investor Relations
(US): Delia Cannan, Taylor Rafferty at +1-212-889-4350 or ; or
Investor Relations (HK): Ruby Yim, Taylor Rafferty at
+852-3196-3712 or ; or Media Contact: Jason Marshall, Taylor
Rafferty, +1-212-889-4350, or Web site: http://www.grentech.com.cn/
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