General Steel's Longmen Joint Venture Signs Supply Agreement with
Tianjin Product and Energy Resources Development Co.
BEIJING, Dec. 5, 2012 /PRNewswire/ -- General Steel
Holdings, Inc. ("General Steel" or the "Company") (NYSE: GSI), one
of China's leading non-state-owned
producers of steel products and aggregators of domestic steel
companies, today announced that its Longmen Joint Venture ("Longmen
JV") has signed a one-year supply agreement with Tianjin Product
and Energy Resources Development Co., Ltd. ("Tianwu"), through
which Tianwu will provide Longmen JV with a minimum of 3 million
metric tons of iron ore at market prices, with favorable credit
terms.
"This agreement with Tianwu is another example of our successful
efforts to enhance our raw materials procurement capabilities by
establishing relationships with key suppliers, including prominent
state-owned enterprises and their subsidiaries. We have worked
closely with Tianwu and its parent Company, Tianjin Materials and
Equipment Group Corporation ("Tewoo Group"), for several years and
are extremely pleased to expand the scope of our cooperation
through this agreement," said Henry
Yu, Chairman and Chief Executive Officer of General Steel.
"The current pricing pressure facing the construction steel market
reinforces the importance of access to high quality raw materials
and maximizing production efficiency. The minimum quantities
guaranteed under this agreement coupled with the favorable
purchasing terms will give us the resources needed to utilize more
of our available production capacity. This increased access to iron
ore and the recent efficiency improvements we have made at Longmen
JV will allow us to better meet the growing demand for our products
in Western China."
Tianwu has provided Longmen JV with credit of up to RMB1 billion for the purchase of iron ore under
this agreement at an interest rate of 10% above the benchmark
lending rate of the People's Bank of China. These financing terms provide the
Company with an attractive alternative to bank debt, while freeing
up cash to support working capital needs.
Tianwu is a leading Chinese trading company specializing in the
procurement, sale and financing of raw materials including iron,
steel and mineral resources. It operates through affiliates in key
Chinese cities including Beijing
and Hong Kong, and international
markets such as Australia and
India. Tianwu is one of
China's largest iron ore trading
companies, having sourced and sold over 16 million metric tons in
2011. It is a subsidiary of Tewoo Group, a state-owned commodity
trading enterprise with nearly RMB2.5
billion in registered assets. Tewoo Group is one of the
top-100 enterprises in China and
one of the Fortune Global 500 companies for 2012. In 2010, General
Steel and Tewoo Group partnered to form Tianwu General Steel
Material Trading Co., Ltd. ("Tianwu JV"), a joint venture 60% owned
by General Steel.
About General Steel Holdings, Inc.
General Steel Holdings, Inc., (NYSE: GSI), headquartered in
Beijing, China, operates a diverse
portfolio of Chinese steel companies. With 7 million metric tons of
crude steel production capacity under management, its companies
serve various industries and produce a variety of steel products
including rebar, high-speed wire and spiral-weld pipe. General
Steel Holdings, Inc. has steel operations in Shaanxi and Guangdong provinces, Inner Mongolia Autonomous
Region and Tianjin municipality.
For more information, please visit www.gshi-steel.com.
To be added to the General Steel email list to receive Company
news, please send your request to generalsteel@tpg-ir.com.
Forward-Looking Statements
This press release may contain certain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on management's
current expectations or beliefs about future events and financial,
political and social trends and assumptions it has made based on
information currently available to it. The Company cannot assure
that any expectations, forecasts or assumptions made by management
in preparing these forward-looking statements will prove accurate,
or that any projections will be realized. Actual results could
differ materially from those projected in the forward-looking
statements as a result of inaccurate assumptions or a number of
risks and uncertainties. These risks and uncertainties are set
forth in the Company's filings under the Securities Act of 1933 and
the Securities Exchange Act of 1934 under "Risk Factors" and
elsewhere, and include: (a) those risks and uncertainties related
to general economic conditions in China, including regulatory factors that may
affect such economic conditions; (b) whether the Company is able to
manage its planned growth efficiently and operate profitable
operations, including whether its management will be able to
identify, hire, train, retain, motivate and manage required
personnel or that management will be able to successfully manage
and exploit existing and potential market opportunities; (c)
whether the Company is able to generate sufficient revenues or
obtain financing to sustain and grow its operations; (d) whether
the Company is able to successfully fulfill our primary
requirements for cash; and (e) other risks, including those
disclosed in the Company's Form 10-K, filed with the SEC.
Forward-looking statements contained herein speak only as of
the date of this release. The Company does not undertake any
obligation to update or revise publicly any forward-looking
statements, whether to reflect new information, future events or
otherwise.
Contact Us
In China:
Jenny Wang
General Steel Holdings, Inc.
Tel: +86-10-57757691
Email: jenny.wang@gshi-steel.com
In the US:
Joyce Sung
General Steel Holdings, Inc.
Tel: (347) 534-1435
Email: joyce.sung@gshi-steel.com
The Piacente Group, Inc.
Investor Relations
Brandi Floberg or Lee Roth
Tel: (212) 481-2050
Email: generalsteel@tpg-ir.com
SOURCE General Steel Holdings, Inc.