Providential Holdings Announces Important Amendments to the Acquisition of Tangshan Yutian Saw Corp., a Leading Chinese Tool Manufacturer
HUNTINGTON BEACH, CA -- (MARKET WIRE) -- 09/08/04 --
Providential Holdings, Inc. (PRVH - news) ; (Berlin Stock Exchange and Frankfurt Stock Exchange: PR7 - WKN 935160) (www.phiglobal.com) today announced important amendments regarding the Stock Purchase Agreement dated June 07, 2004, between the Company and Tangshan Yutian Saw Corp ("TYSC" or "YTSAW") (www.ytsawblades.com), a leading Chinese manufacturer of circular saw blades. These amendments are expected to bring more favorable terms and additional benefits to PRVH.
According to the recent amendments to the Stock Purchase Agreement, the final purchase price of TYSC is dependent upon the results of the current financial audit commissioned by PRVH, which is being conducted according to the US GAAP and SEC requirements and expected to be completed by the end of September. Using the original 2003 audited financial statements provided by TYSC as the basis, the final purchase price will be revised, either upwards or downwards, based on the actual changes in assets, liabilities and net income, if any, between the original audited financial statements by TYSC and the new audited financial statements commissioned by PRVH. TYSC and PRVH have agreed to the following adjustment formula: For every US dollar ($US 1.00) change in assets, the purchase price will be adjusted by $US 0.30; for every US dollar ($US 1.00) change in liabilities, the purchase price will be adjusted by $US 1.00; and for every US dollar ($US 1.00) change in net income, the purchase price will be adjusted by $US 0.30.
PRVH will be filing the necessary reports with the SEC upon the completion of the audit and does not expect the final numbers to be substantially different from the original statements submitted by TYSC.
Both companies have also agreed to extend the maturity date of the non interest-bearing promissory note to June 23, 2005. The final amount of the note will be adjusted according to the results of the financial audit and is expected not to exceed the original $45 million.
The extension of the maturity date will undoubtedly give PRVH more funding options. PRVH plans to take TYSC public well before June 2005 and may choose to pay a portion or all of the note through the floating of TYSC's common shares.
About Providential:
Providential Holdings (www.phiglobal.com) and its subsidiaries engage in a number of diverse business activities, the most important of which is manufacturing of cutting tools (www.ytsawblades.com) .The Company also acquires and consolidates special opportunities in selective high-growth industries to create additional value; acts as an incubator for emerging companies and technologies; and provides financial consultancy and M&A advisory services to U.S. and foreign companies.
URL: www.phiglobal.com
Safe Harbor
Except for historical information contained herein, the statements in this news release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's actual results in the future to differ materially from forecasted results. These risks and uncertainties include, among other things, the company's ability to attract qualified management, raise sufficient capital, and effectively compete against similar companies.
These and other risks are identified in the company's SEC filings and should be considered in evaluating the forward-looking statements made herein.
Contact:
Providential Holdings
Henry Fahman
714-843-5455
www.phiglobal.com
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