Hartcourt Completed the Challenger Acquisition All Five Divisions of Challenger Posted Strong Q1 Growth
LOS ANGELES, CA, Apr. 20, 2004 (MARKET WIRE via COMTEX) -- The Hartcourt
Companies, Inc. (OTC BB: HRCT) (Frankfurt: 900009), www.hartcourt.com, announced
today that it has completed all governmental requirements and completed the
acquisition of Beijing Challenger group of companies (Challenger) as per the
signed agreement dated December 9, 2003. Since Hartcourt owns 51 percent of all
outstanding shares of Challenger, it will be able to consolidate 100 percent of
Challenger revenue starting the first quarter of 2004.
Brummbärgrüsse
The purchase price for 51 percent of Challenger is RMB31.3 Million (US$3.8
Million) payable in 6,324,748 restricted common shares of Hartcourt, calculated
at US$0.60 a share, and an investment of RMB5 Million (US$610,000) into one of
the wholly-owned subsidiaries of Challenger to strengthen its growth. The
management team of the group will hold the remaining 49% of Challenger. Due to
the recent decline in Hartcourt's share price, additional 500,000 shares are
issued at completion.
Started in 1995, Challenger is currently one of the key regional distributors
and marketing partners for IBM (www.ibm.com/cn) Challenger's five subsidiaries
specialize in the full range of IBM products including NT server, UNIX server,
storage devices, notebook and desktop computers, as well as offering complete
range of integrated solutions to its customers in corporate, banking,
telecommunication, education and government sectors. Its sales network covers
the Northern China market including Beijing, Tianjin, Shandong, Shanxi, Hebei,
Henan, and Inner Mongolia.
Challenger recorded combined revenue of RMB550 Million (US$66.7 Million) in
2003. In the first quarter of 2004, Challenger's all five divisions posted
strong growth compare to the first quarter of 2003. It further expanded its
business in government and corporate sectors by winning key contracts to supply
to government bodies including: China Banking Regulatory Commission, China
Insurance Regulatory Commission, China Customs, and China Railway Ministry; and
to corporate customers including: Siemens, China Telecom, China Tobacco and
Sony, etc. Its notebook division posted over 50% quarter over quarter growth
compare to 2003.
More details on Challenger could be obtained from its Web sites,
www.changdegroup.com, www.shhelian.com or www.itserver.com.cn or Harcourt's web
site, www.hartcourt.com.
Mr. Song Ming, Chairman of Challenger Group, comments, "We are very excited to
begin the year of 2004 as a part of Hartcourt's fast growing distribution
network in China. Under Hartcourt's guidance, we have successfully launched our
service business and acquired important customers in both corporate and
government sectors. Further improvement effort of our operations is expected to
meet Hartcourt's demand on corporate governance, financial strategy and
management planning. We look forward to contribute strongly to Hartcourt's
growth, and to work with Hartcourt's subsidiaries for additional market share
and increased profit margin."
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