Tewoo Group Intends to Make Equity Investment into General Steel
BEIJING, October 15, 2014 /PRNewswire/ — General Steel Holdings, Inc. (“General Steel” or the “Company”) (NYSE: GSI), a leading non-state-owned steel producer in China, today announced that it has signed a memorandum of understanding (the “MOU”) with Tewoo Group Co., Ltd. (“Tewoo Group”), a Fortune Global 500 company, to co-develop bulk commodity e-commerce business.
The MOU establishes a long-term strategic partnership (the “Partnership”) to mutually pursue business opportunities in bulk commodity e-commerce, asset leasing, and financing. The Partnership is consistent with the Company’s previously stated intention to invest into high-growth, high-margin industries in order to expand its business scope.
Under the terms of the MOU:
- Tewoo Group intends to make an equity investment into General Steel, with specific terms to be subsequently and mutually determined by both parties;
- The Partnership will co-develop bulk commodity e-commerce business;
- The Partnership will co-construct a logistic base in Maoming City in China’s Guangdong Province, where General Steel has strategic advantages in land reserve; and
- The Partnership will co-develop financial services, including capital lease, trade financing, and credit facilities to capture the strong demand for such services from the e-commerce platform’s customers.
Tewoo Group ranks 185th on the Fortune Global 500 List in 2014, is the largest state-owned enterprise in Tianjin, and is one of the 20 largest trading enterprises in China supported by the Ministry of Commerce. Tewoo Group’s e-commerce platform, Tewoo Bulk Commodity, currently offers a wide selection of bulk commodities, including iron and steel, nonferrous metal, petroleum, coal and coke, minerals, chemicals, and building materials.
“We are very delighted to announce this strategic partnership with Tewoo Group, one of China’s leading state-owned enterprises, marking our entry into the fast-growing and profitable bulk commodity e-commerce platform,” said Henry Yu, Chairman and Chief Executive Officer of General Steel, “Tewoo Group is a proven leader with expansive customer reach, and we believe our strategic collaboration will not only mutually benefit both parties, but will also effectively help General Steel expand into targeted high-growth and high-margins industries with mitigated risks.”
“Moreover, we are excited about the attractive market opportunities for financial services within the e-commerce platform, as well as General Steel’s prospects of cross-selling its steel products into the platform’s large customer base. We anticipate this partnership will help General Steel capitalize on significant growth opportunities and provide positive returns for our shareholders,” Mr. Yu concluded.
About Tewoo Group
Founded in 1993, Tewoo Group, also known as Tianjin Materials and Equipment Group Corporation, is a diversified state-owned enterprise that operates businesses in commodity trade, logistics, real estate development, financial services, and vocational education. Tewoo Group is also Ranked 51st on the China List of Top 100 Enterprises and 185th on the Fortune Global 500 List. In 2013, Tewoo Group’s total revenue reached RMB 337.9 billion. For more information, please visit http://www.tewoo.com/en/.
About General Steel
General Steel, headquartered in Beijing, China, produces a variety of steel products including rebar, high-speed wire and spiral-weld pipe. The Company has operations in China’s Shaanxi and Guangdong provinces, Inner Mongolia Autonomous Region, and Tianjin municipality with seven million metric tons of crude steel production capacity under management. For more information, please visit www.gshi-steel.com.
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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 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.
General Steel Holdings, Inc.
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