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: kentlo@grentech.com.cn
Investor Relations (US):
Delia Cannan
Taylor Rafferty
Tel: +1-212-889-4350
Email: GrenTech@Taylor-Rafferty.com
Investor Relations (HK):
Ruby Yim
Taylor Rafferty
Tel: +852-3196-3712
Email: GrenTech@Taylor-Rafferty.com
Media Contact:
Jason Marshall
Taylor Rafferty
Tel: +1-212-889-4350
Email: GrenTech@Taylor-Rafferty.com
SOURCE China GrenTech Corporation Limited