BEIJING, Nov. 13, 2015 /PRNewswire/ -- General Steel
Holdings, Inc. ("General Steel" or the "Company") (NYSE: GSI)
announced today that it has regained compliance with the continued
listing standard of the New York Stock Exchange (the "NYSE")
relating to a minimum average share price of at least $1.00 over a 30 trading-day period. The Company's
Board of Directors (the "Board") has also authorized the Company's
management to investigate and pursue the potential sale of all its
ownership in Maoming Hengda Steel Company, Ltd. ("Maoming Hengda")
and Shaanxi Longmen Iron and Steel Co., Ltd. ("Longmen Joint
Venture") in order to unlock the hidden value in Maoming Hengda's
land assets, divest and restructure steel business.
In a letter dated November 9,
2015, the NYSE notified the Company that the average closing
price of its common stock for the 30 trading-days ended
November 9, 2015 was above the NYSE's
minimum pricing standard of $1.00,
and accordingly, General Steel has successfully regained compliance
with the NYSE minimum pricing standard.
With the Company's recent acquisition of controlling interest in
Catalon Chemical Corp, ("Catalon") providing large business
opportunities, highly-positive profit margins, and excellent growth
potential in the cleantech sector, the Company has proposed and
received approval from its Board for the Company's management to
take the next step in its previously announced plan to reduce the
complexity of its business structure, consistent with the objective
for internal simplification and operating efficiency. Due to
continuing excess supply, weakening economic growth in China, and sagging prices combining to result
in compression in margins and operating losses with respect to its
steel production operations, the Company's management has begun to
investigate and pursue the potential sale of its land assets, and
divesting and restructuring its non-profitable steel production
business – while retaining its current steel and iron ore trading
activities – and using the proceeds received from any such
transaction to more fully develop and grow its cleantech
business.
If the divestiture and restructuring of the Company's steel
business is fully completed as currently contemplated, General
Steel's remaining businesses will be primarily comprised of General
Steel (China) Co., Ltd, a trading
company that mainly sources overseas iron ore for steel mills, and
Catalon, which develops and manufactures De-NOx honeycomb catalysts
and industrial ceramics.
Maoming Hengda and Longmen Joint Venture's current daily
operations will not be impacted by the Board's authorization. Given
the Board's written consent, the Company is engaging in preliminary
discussions with potential purchasers for Maoming Hengda and
Longmen Joint Venture, and as a result, the Company will report its
financial results for the third quarter of 2015 and subsequent
quarters with Longmen Joint Venture, which formerly represented
over a majority of the Company's consolidated sales, and Maoming
Hengda presented as one-line items in both the Company's Condensed
Consolidated Balance Sheets and Condensed
Consolidated Statements of Operations.
Ms. Yunshan Li, Chief Executive
Officer of General Steel commented, "In reviewing our business
strategies, our senior management team and the Board undoubtedly
believe that our ongoing business transformation should focus the
Company's resources into the high-growth, high-profitability
cleantech business and the viable trading business, and divest away
from the currently burdensome steel production business."
"The Company's strategic objective is to greatly streamline our
financials and business focus going forward. Divesting Maoming
Hengda and Longmen Joint Venture would significantly enhance our
cash position and alleviate us of the Longmen Joint Venture's debt
burden on our balance sheet. At the same time, as we demote
Longmen Joint Venture's financials to a one-line item below
operating results, investors will be able to better gauge our
performance and progress. Investors should note, however,
that as of today we have not retained any financial or other
advisors with regard to the divestiture plan and the ultimate
timing will depend on the results of our negotiations, receipt of
acquisition proposals and structuring any significant transaction
in a manner consistent with our obligations to stockholders."
About General Steel
General Steel Holdings, Inc. is headquartered in Beijing, China and produces a variety of steel
products including rebar and high-speed wire. Through its majority
equity interest in Catalon, the Company also develops and
manufactures De-NOx honeycomb catalysts and industrial
ceramics.
To be added to the General Steel email list to receive Company
news, or to request a hard copy of the Company's Annual Report on
Form 10-K, please send your request to investor.relations@gshi-steel.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, including those disclosed in the Company's most recent
Annual Report on Form 10-K, filed with the United States Securities
and Exchange Commission. 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
General Steel Holdings, Inc.
Joyce Sung
Tel: +1-347-534-1435
Email: joyce.sung@gshi-steel.com
Asia Bridge Capital Limited
Carene Toh
Tel: +1-888-957-3362
Email: generalsteel@asiabridgegroup.com
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SOURCE General Steel Holdings, Inc.