Good Article about Hartcourt
Jul 11, 2007 (M2 PRESSWIRE via COMTEX) -- Streetinvesting.com is the leading online financial newsletter community with thousands of investors from around the world. Our goal is to bring our theories and techniques to investors seeking a different and unique approach to investment ideas. We have a research team that has been built upon the premise of finding companies that we feel may interest investors looking for that unique and tactical edge.
The Hartcourt Companies Inc. (HRCT) (FRANKFURT: 900009) closed at $ 0.072 with a trading volume of 1,077,358 on the Over-The-Counter Bulletin Board this Tuesday.
Our equity research team has been walking the mile, delving into the pool of potential companies trading in the Over-The-Counter Bulletin Board. As the market stirs up more opportunities and challenges everyday, pulling investors on an ever-ending game of nerves and wits, we have brought forward the following contender, The Hartcourt Companies Inc.
On Tuesday July 10th 2007, The Hartcourt Companies Inc. reported the news below to the public providing our researchers with the unique occasion to warrant an investigation into the company and its future throughout the endless bid-and-ask war. The Hartcourt Companies Inc. announced that it has entered into a Memorandum of Understanding ("MOU") with Chongqing Zhengda Software Group Co. Ltd ("ZDSG") to acquire a 100% equity interests in its two subsidiaries: Chongqing Zhengda Education Group ("ZDEG") and Chongqing Zhengda Hengling Co. Ltd ("ZDHL").
The proposed consideration to be paid by the Company for the acquisition is about 415 million restricted shares of our common stock. ZDSG has agreed to guarantee the total profit after tax of ZDEG and ZDHL of not less than RMB 25 million (US$ 3.29 million), RMB 35 million (US$ 4.6 million) and RMB 50 million (US$ 6.58 million) each year for the three years following closing (2007-2009). The Company and ZDSG agreed that the above-mentioned restricted shares shall be released to the vendors in three equal installments in three years on the condition of the above mentioned profits realized accordingly.
As a part of the deal, the Company also agreed to raise US$4 million cash to finance the expansion plan of ZDEG and ZDHL as well as the equity buyout from their minority shareholders. Several Asia based institutional investors have signed term sheets, with a view to providing such funds as equity investors of the Company, subject to the final completion of the acquisition deal.
ZDEG is the sponsor of Chongqing Zhengda Software Polytechnic College (CZSPC), which has over 7,000 students in campus and ZDHL is a software outsourcing service company which uses the talents (faculties and students) of CZSPC to provide software outsourcing services to multinationals in China and internationally. After the completion of the acquisition, ZDSG will become the controlling shareholder of the Company with at least 50% equity interests in the Company.
Victor Zhou, CEO of the Company, commented, "The acquisition is part of ongoing strategy to build up the operating assets of the Company in vocational education business. I believe the merger and acquisition will considerably change the Company both in business and its earnings in coming years. Given the size and substantiality of the deal, we have sent a big due diligence team to Chongqing and started to prepare a proxy statement, which will be sent out to fellow shareholders."
"With the solid and substantial cash profits to be generated by ZDEG and ZDHL, we believe Hartcourt can provide huge value to current shareholders, but also make it easier to raise more funds to do further acquisitions," added Dr. Yungeng Hu, President and CFO of the Company.
Hartcourt Companies Inc. is a holding company for China's providers of vocational education and technical training services. Hartcourt structures itself so that its portfolio of companies and affiliates can operate well-recognized institutions with dominant positions within their regions and sectors. Founded in 1983 and a US corporation with subsidiaries internationally, particularly in Asia, Hartcourt Companies moved its operation headquarter to Shanghai, China in 2002. Hartcourt used to be one of the largest IT product distributors in China.
