|ZTC is now CEVO|
|"The Board is considering a number of options for the Company which include seeking to refinance it with equity and/or loans to allow it time to seek a new business to acquire (a reverse takeover under the AIM Rules), or to complete either a members' voluntary or creditors' winding up. No decisions in this regard have yet been reached."|
roderick montrose smythe
|RNS Number : 5813K
ZTC Telecommunications plc
22 December 2008
22 December 2008
ZTC Telecommunications Plc ('ZTC' or 'Company')
Removal of a director and update
The Board of ZTC Telecommunications Plc (AIM: ZTC) announces further information following the previously announced disappearance of Mr Chaohui (aka Charles) Huang, CEO and majority shareholder of the Company.
Removal of a director
Following the disappearance of Charles Huang, the Board of ZTC has resolved (in accordance with the Company's articles of association) to effect his removal from the Board with immediate effect. The Board has also taken steps to terminate Mr Huang's service agreement with the Company with immediate effect.
Although the Board has not yet concluded its investigations, it seems increasingly unlikely that the Company's business in China will be able to resume trading and, as such, the ability to realise net assets for the benefit of shareholders may be difficult. It is possible therefore, given potentially long recovery procedures, a deteriorating economy and limited resources, that the Chinese and Hong Kong subsidiaries of ZTC may have negligible recoverable value.
To the best of the knowledge and belief of the Board, ZTC Telecommunications Plc, the group's AIM-listed holding company, has no guarantees or cross guarantees with its subsidiary companies. The Board, however, cannot exclude the possibility that the Company's former CEO has entered into obligations ostensibly on behalf of ZTC and, accordingly, there may be 3rd party claims of which the Board is currently unaware. The Board can confirm that to date it has not been notified of any such 3rd party claims. Nevertheless, ZTC has a small cash balance and is able to meet its obligations in the short term.
The Board is considering a number of options for the Company which include seeking to refinance it with equity and/or loans to allow it time to seek a new business to acquire (a reverse takeover under the AIM Rules), or to complete either a members' voluntary or creditors' winding up. No decisions in this regard have yet been reached.
The Board is also reviewing whether an EGM of the Company should be convened pursuant to section 656 of the Companies Act 2006 ('duty of directors to call meeting on serious loss of capital') to consider whether any, and if so what, steps should be taken to deal with the current situation but has not yet reached any firm conclusions.
Should the Board determine that a members' voluntary or creditors' winding up should be completed, it is unlikely that the Company will go to the expense of publishing its annual accounts for the year ended 30 June 2008 or hold its 2008 AGM before 31 January 2009, as it is required to do under the Companies Act 2006.
Should a refinancing be decided on as the best way to preserve some shareholder value, the Company will publish its annual accounts for the year ended 30 June 2008 and hold its 2008 AGM as soon as possible. Further, it is very likely that existing shareholders will suffer dilution should a significant number of shares be issued to the provider(s) of such finance. Further, it is unlikely that shares will be offered widely to shareholders for reasons of the significant regulatory costs involved in making such an offer. Nevertheless, the Board has determined that should a share issue be proposed, such an issue would be subject to shareholder approval.
The Board is advised that the Company is not currently subject to the UK City Code on Takeovers and Mergers ('Takeover Code') by virtue of the fact that it is managed from abroad, despite its establishment as a company registered in England and Wales. As a result, none of the provisions of the Takeover Code (for example such as the requirement for a shareholder acquiring voting rights in excess of 30% to make a general offer for the Company) will apply. Nevertheless, the approval that would be sought in such an instance (as described earlier) will give shareholders a chance to vote on such an event.
The Board hopes that should a refinancing be successful, trading in the Company's shares on AIM will recommence.
A further announcement will be made in due course.
ZTC Telecommunications plc
Mark Syropoulo, Finance Director
+86 21 6867 0012
Frank Lewis, Chairman
+44 7785 273 111
Fairfax I.S. PLC
Nominated Adviser & Broker
Adam Hart/Laura Littley
+44 20 7598 5368
This information is provided by RNS
The company news service from the London Stock Exchange|
roderick montrose smythe
|Pre-close update out:-
The deal with Visio has been knocked back massivley on scale.
I would have thought that they knew of the lack of financing for this in May and should have announced a retraction sooner?
Charles Huang seems to be personally financing the purchase of raw materials.
I wonder how deep his pockets go?
If PBT was £1.3m for first half and expected to be £2m for full year, then that is slightly more than the loans made to them by CH - effectively they make a lot less profit?
Is this another case of window dressing the numbers?|
|A lot of the depression hanging over Chinese stocks is the fear that inflation is going to severely hurt corporate profits going forward. Increased costs and mounting wage pressure, along with falling exports and a reduction in consumer spending is all worries that is forcing the Chinese stock markets to collapse (the bubbles and well burst now).
Obviously this massive increase in inflation and all its worries going forward is going to depress most other China stocks too, not just the ones listed in China and suffering a collapse in their SP's.
China struggling to control rapid inflation Last month's 8.3 percent increase in consumer prices threatens to cripple the country's mostly poor population.
By Joe McDonald
BEIJING - China issued more gloomy inflation news yesterday, saying prices of farm goods jumped 25.5 percent in the first quarter and housing costs rose 11 percent in March despite efforts to dampen price rises that are battering ordinary Chinese.
Communist leaders, worried about a possible public backlash, are trying to ease food shortages blamed for the price spike that began in mid-2007. But winter storms disrupted that effort, and analysts expect inflation to stay high as late as May.
Retail consumer prices rose 8.3 percent in March, a slight decline from February's 8.7 percent, the highest rate in nearly 12 years. That was driven by a 21 percent rise in food costs, including a 66.7 percent increase for pork, the country's staple meat.
In its latest move, the government said it would pay subsidies to encourage egg farmers to increase output in order to avert possible shortages that could push up prices, the official Xinhua News Agency reported.
The country's main planning agency, the National Development and Reform Commission, announced yesterday that housing prices in 70 cities rose 11 percent in March compared with the same month last year.
That was despite government efforts to discourage speculation and push developers to create more housing for low-income families.
The rise in wholesale farm prices was driven by a 62.1 percent jump in the cost of pork and 36.5 percent jump for beans over the same period last year, the National Bureau of Statistics reported. The figures represent the price of goods as they leave the farm for sale to food processors or in farmers' markets.
The government has made a priority of reining in inflation, which is hitting China's poor majority hard in a society where families spend up to half their incomes on food. Demonstrations followed bouts of high inflation in the 1980s and '90s.
Beijing has imposed controls on retail prices of many food items and is trying to bring down wholesale costs by encouraging farmers to produce more pork and grain.
But rising costs to food processors and retailers is creating increased pressure to pass on the burden to consumers. Two major dairies were given permission last month to raise prices, and the government says it will consider appeals from other suppliers.|
|lonrho, they can only pass on so much, but with inflation and rising wage costs, it can become "too much to pass on" and then of course the competition of the ones who hold off raising prices, to increase sales........
Difficult times for clear forecasts.|
you seem to assume that chinese companies will not be able to pass on cost price increases in the local market,that may be true in regulated areas,for instance haike re petroleum,but is it true in regards say telecoms or cement manufacturing for example.|
|Pp, following this one with interest. Any idea on the timescale for funding? I see there was a piece in Shares magazine as one to watch at this price.|
|For some clarity on the GBP / CNY exchange rate and movements, 5 year chart added to the header.
There are numerous reasons the CNY is appreciating, although the reasons are not due to a "wonderful Chinese economy". Inflation is rampant, and so interest rates will need to keep going up, and so the CNY keeps rising.
As the CNY rises, all of China's exports to the world get more expensive, those buying goods from China are now paying more, and so China is now exporting inflation by its rising Yuan. If you have only 1 baker who bakes all the bread, and he raises his price, then that raise is passed on to everyone who buys anything from that single baker.
This causes factories to move manufacturing out of China.
On top of this China has introduced new labour laws from 1st Jan 2008, which have greatly increased wage costs, which adds to inflationary pressure.
The Yuan is rising, but not on the back of a good story, its rising on one which is very gloomy for the outlook.
Its still not reached 5 year high levels, but while on the one hand it might for the sake of a London listing improve EPS in sterling terms (which means jack sh*t to the business model as costs are in CNY), the downside is the rising costs at home in CNY terms.......which will be the concern moving forward, after everyone has had a little "wow its raised sterling EPS" in the short term, the mid to long term is hit by the curve ball of the rising costs hitting home...........
IMV, beware of people "hyping" the short term effects of the rising Yuan, the fundamentals of its rise will hit many of these companies with significantly rising costs at home in the mid term.
Short term traders......hyping the normal April rally, before it all gets "sold in May" imo.|
|General China stuff.
These from the official mouthpieces of the Communist Party, so should be taken as "official".
I do wonder if some people in the West have forgotten just how damaging inflation is.......and how long it stays with you.....and how hard it is to fight it........
ICBC says China inflation rate to hit 8% in Q1
April 04, 2008
The Industrial and Commercial Bank of China (ICBC) is forecasting an 8 percent increase in the country's Consumer Price Index (CPI) for the first quarter of 2008. The official government figures come out in mid-April.
The bank said in a report issued on Thursday that the CPI would hit 8.2 percent in March, sl.......................
Statistician: China risking overall inflation
By Tu Lei (chinadaily.com.cn)
Updated: 2008-04-03 15:47
China faces overheating of its fast-growing economy, as price rises could turn into overall inflation from core inflation, said Xie Fuzhan, lead economist with the National Bureau of Statistics.
To tape the inflation, Xie said, the government should strictly curb investments and proje............................
This from CNN on the Yuan :
Worth a read :
Rising yuan crunches outsourcers' bottom line
China's currency is hitting record highs against the U.S. dollar - a problem for apparel companies and others that rely on low-cost Chinese manufacturing.
Last Updated: April 3, 2008: 11:03 AM EDT
(FORTUNE Small Business) -- The Chinese yuan reached a record high against the dollar last week, the latest in a series of sharp rises that are changin............................|
|teifi, not aware of any Push To Talk requirements or capacity.|
|pp, are you aware of any capacity for PTT. Following AIM:MBT for some time, I hear they may be looking at this in some form of partnership?|
Caution in the outlook, still looking for funding for working cap imo, placing coming ? .
ZTC experienced a positive first half year to 31 December 2007. However, the
severe winter conditions in China during the early part of 2008 impacted both
sales and distribution of handsets in the run-up to the important Chinese New
Year holiday. I am pleased to report that, following this disruption, we are now seeing a return to normal trading conditions with sales running at anticipated levels.
We have signed our largest distribution agreement so far and, provided we can
support the increased levels of working capital required, we are confident that
ZTC will continue to be well positioned to take advantage of this growth. While
we remain aware of the risks of increasing competition in local markets, the
continued acceptance of our recent product launches gives the Board optimism for the full year."|
|One of the concerns for any China based company (or one that relies on China manufacturing to some extent) is the fact that Chinese inflation is rampant, and costs are rising very fast, not only your standard items affected by day to day inflation, but very fast rising labour costs to as wages rise and demands for higher wages gains momentum.
Inflation in China could be a detrimental point to performance on many companies, whether that is minimal or signficiant will be on a case by case basis, only possible to be seen as interims and prelims keep coming through.
Always worth considering, and not just ignore it, it has the potential to cause some upsets.....maybe not this stock though, who knows.
China Moves to Stem Inflation and Calm Investors
By DAVID BARBOZA
Published: March 19, 2008
SHANGHAI - Stock prices plummeted in China on Tuesday over inflation fears and growing concerns about the ripple effects of an economic slowdown in the United States. Showing its determination to hold down prices, the Chinese central bank then moved to tighten lending.
Shares on the Shanghai Stock Exchange tumbled nearly 4 percent, with the composite index ending at 3,668.90. The index is down nearly 40 percent from its record high last October. The fall in the Shenzhen composite index was even steeper Tuesday - off 6.6 percent, to close at 1,082.28.
Shares appeared to be recovering somewhat in early trading on Wednesday, after the United States central bank cut interest rates in a bid to rekindle growth.
In Hong Kong, shares rose on Tuesday by 1.42 percent. Other Asian markets, including Japan, Taiwan, South Korea, India and Indonesia, also rebounded modestly after a sharp sell-off Monday. Some of those markets appeared to be extending those gains on Wednesday.
The Tuesday sell-off in China came after Prime Minister Wen Jiabao said at a televised news conference on Tuesday morning that inflation this year would probably exceed the government's target of 4.8 percent, after a sharp rise last year. Continuing inflation is regarded as a sign that the Chinese economy may be overheating.
Officials in Beijing now say that fighting inflation is the government's top priority. That could mean raising interest rates, a step that often.....................|
|One of the newer models.......phone of course, not female.......
|The troublesome words are the "and existing contracts" imv.
That tends to suggest they are already at the "biten off more than can chew" stage.
Therefore, potential short and long trades here, will they get funding ? if so at what price ? and then from there, can they deliver shareholder value going forward ?|
|Obviously the market did not like to hear this, and so the share price has tumbled down.
Demand for the Company's products has continued to accelerate since the IPO, and this Agreement represents the largest contract which the Company has secured to date. However, in common with many small and medium size businesses within China, our rate of growth is tempered by working capital constraints. The Company's ability to ensure timely fulfilment of this and existing contracts is subject to it securing additional working capital. The Board is therefore currently reviewing financing arrangements in order to meet future requirements."
However, hats off to their honesty.|