EIMO OYJ STOCK EXCHANGE RELEASE 01.11.2000 AT 9:00 1 (3)
EIMO ANNOUNCES EXPANSION INTO CHINA
Eimo Oyj has today signed additional agreements as part of its expansion plans
in the People's Republic of China (PRC).
Eimo (HK) Ltd., a joint venture company controlled and majority owned (70%
direct, 80.5% including indirect) by Eimo, will establish operations in the PRC
through the acquisition from Mr. Y.S.Lai of 100% of the share capital of Century
Step Company Ltd., a Hong Kong company operating a 100% owned manufacturing
subsidiary Century Step Plastic (Shenzhen) Company Ltd. in Shenzhen, China.
Development of a new - greenfield - telecom parts manufacturing operation is
also being planned.
Century Step provides Eimo an entry into the Chinese and Asian markets. Century
Step had consolidated sales of approximately HKD 17 million (EUR 2.6 million) in
1999 with a net profit equal to approximately 14% of sales. It employs 180
people with over 170 of them located in PRC where it operates in approximately
4,000 sq metres of leased space in Shenzhen, Guangdong Province. Although
Century Step has traditionally served the consumer goods sector, it has recently
been developing more advanced capabilities with the goal of manufacturing
advanced engineered parts. Closing of the acquisition is expected by January 1,
2001. Of the total purchase price of HKD 18.5 million (EUR 2.8 million), HKD
8.5 million is expected to be paid in cash and HKD 10 million will be utilized
to fund a five (5) year loan to Eimo (HK) Ltd. In addition, Century Step is
expected to require approximately EUR 1 million of additional capital investment
during 2001 to upgrade and expand its manufacturing capabilities.
Eimo's minority partner in Eimo (HK) Ltd. is CIM Technology Ltd. (British Virgin
Islands). CIM Technology is owned by Hong Kong businessmen Mr. Y.S. Lai (35%)
and Mr. K.H. Woo (30%), and Eimo Oyj (35%). Final agreements have been signed
consistent with Eimo's previous May 2000 announcement covering the establishment
of CIM Technology. As previously announced, CIM Technology will control and own
56.9% of CIM Precision Molds (HK) Ltd. and 100% of CIM Precision Molds
(Dongguan), a PRC company being established.
Eimo's cash investment in CIM Technology is approximately HKD 15 million (EUR
2.3 million), of which the majority will be invested onward into Eimo (HK), with
the remaining funds to be invested in CIM Dongguan. In exchange for their
collective ownership interest of 65% in CIM Precision Molds, Mr. Lai and Mr. Woo
contributed to CIM their total holding of 56.9 % of the outstanding capital
stock of CIM Precision Molds (HK) Ltd. Mr. Lai has signed service contracts
with both Eimo (HK) and CIM Technology.
CIM Precision Molds (HK) Ltd. is a premier mold manufacturer with operations in
Hong Kong. It anticipates total sales of approximately HKD 35 million (EUR 5.3
million) in 2000 with a net profit exceeding 10%.
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Eimo and CIM Precision Molds have cooperated on a number of projects. The
companies intend to continue and expand their cooperative relationship by
sharing technologies, development work and through joint capacity planning. CIM
Precision Molds' existing customers include very large global companies such as
Nokia.
CIM Precision Molds (Dongguan) is currently obtaining operating permits and
training personnel. Expansion in mold manufacturing operations is expected once
all permits have been obtained - initially in rented premises, with a later move
to a purpose-built facility in Dongguan being planned. CIM Dongguan is not
expected to have significant sales during 2000-2001.
The acquisition of Century Step is subject to satisfactory completion of due
diligence, which is expected to be completed before the end of November, 2000.
Except for the acquisition of Century Step, the agreements are effective
immediately.
Overall, the above mentioned operations - not taking into account establishment
costs of the yet-to-be-decided greenfield operation - are expected to result in
approximately EUR 0.3 million of additional set-up and other costs to Eimo in
2000, and to have some positive impact on consolidated earnings during 2001.
Eimo Oyj
Heikki Marttinen
President and CEO
Further information 07-11 a.m. and 1.30-3.00 p.m. (London time):
Elmar Paananen, Vice Chairman, Investor Relations, Eimo Oyj
Tel. + 358 500 503865
www.eimo.com
DISTRIBUTION:
HEX Helsinki Exchange
Press
Investors are urged to read the information to be filed with the United States
Securities and Exchange Commission in connection with the merger with Triple S
Plastics, Inc., including the proxy material to be sent to the holders of common
stock of Triple S to solicit their approval of the Merger Agreement and the
transactions contemplated thereby and the registration statement to be filed by
Eimo on Form F-4 with respect to ordinary shares of Eimo to be issued in
connection with the transaction, each of which will include a copy of the Merger
Agreement as an exhibit. Such documents, when filed, will be available free of
charge from the SEC website at www.sec.gov.
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This press release includes statements that constitute forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. This information involves risks and uncertainties
that could cause actual results to differ materially from the forward-looking
statements. For certain information regarding these risks and uncertainties,
reference is made to Eimo's March 1999 Offering Circular for 5,000,000 share
combined offering (copies of which are available from Eimo upon written request)
and Triple S' Annual Report on Form 10-K for the year ended March 31, 2000.