A-Power Energy Generation Sys (MM) (NASDAQ:APWRW)
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A-Power Energy Generation Systems Ltd. (NASDAQ:APWR)
(NASDAQ:APWRU) (NASDAQ:APWRW) ("A-Power"), announced
today that its Chinese operating subsidiary, Liaoning GaoKe Energy Group
(“GaoKe”), has
entered into a license agreement with Fuhrlander AG (“Fuhrlander”)
of Germany that gives GaoKe the right to produce and sell Fuhrlander’s
2.5 MW series wind turbine in China.
As part of the agreement, Fuhrlander will assist GaoKe in developing a
production plant under construction in Shenyang that emulates Fuhrlander’s
plant in Germany, with completion expected in mid-2008. Fuhrlander will
also work closely with GaoKe to ensure that the wind turbines are
produced to specifications. Under the technology license, GaoKe has the
right to any advancements or improvements that Fuhrlander makes to its
2.5MW series wind turbine without charge.
To secure these rights, GaoKe has agreed to pay Fuhrlander approximately
$13.9 million (which covers the license, training and a fixed royalty).
Fuhrlander will also receive a minority percentage of the gross profit
generated from the sale of the first 100 wind turbine units manufactured
by GaoKe. The sales price of the 2.5MW wind turbine is expected to be
RMB 20 to 24 million ($2.7 to $3.2 million) with 8 to 12% gross margins.
GaoKe will have the capacity to produce a maximum of 300 of the 2.5MW
wind turbines on an annual basis after the first phase of its wind
production facility is completed later this year.
Mr. Jinxing Lu, A-Power’s Chairman and CEO,
commented, “We are very excited to become
Fuhrlander’s partner in China. Fuhrlander is
a highly respected wind turbine developer in Germany, and it has been
supplying state-of-the-art turbines to the global markets for over 20
years. Its 2.5 MW wind turbine is one of the largest commercialized
land-based wind turbines in the world, and we expect that it will play a
major role in filling the substantial demand in China’s
growing green energy market.
About A-Power
A-Power Energy Generation Systems, Ltd., formerly Chardan South China
Acquisition Corp., through its PRC operating subsidiary, Liaoning GaoKe
Energy Group Co., Ltd., is the largest provider of distributed power
generation systems in China and will enter into China’s
wind energy market in 2008. The Company is also focused on developing
and commercializing additional renewable energy technologies and has
strategic relationships with both Tsinghua University and the China
Sciences Academy in Guangzhou.
This press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, about
A-Power and GaoKe. Forward-looking statements are statements that are
not historical facts, including statements about facility construction
plans and expected capacity, product launch dates, expected sales prices
and profitability, and anticipated commercial acceptance. Such
forward-looking statements, based upon the current beliefs and
expectations of A-Power’s and GaoKe’s
management, are subject to risks and uncertainties, which could cause
actual results to differ from the forward looking statements. The
following factors, among others, could cause actual results to differ
from those set forth in the forward-looking statements: unanticipated
construction or product introduction delays; business conditions in
China; continued compliance with government regulations; legislation or
regulatory environments, requirements or changes adversely affecting the
businesses in which GaoKe is engaged; cessation or changes in government
incentive programs; fluctuations in customer demand; management of rapid
growth and transitions to new markets; intensity of competition from or
introduction of new and superior competitive products; timing, approval
and market acceptance of new product introductions; general economic
conditions; geopolitical events and regulatory changes, as well as other
relevant risks detailed in A-Power’s filings
with the Securities and Exchange Commission. The information set forth
herein should be read in light of such risks. Neither A-Power nor GaoKe
assumes any obligation to update the information contained in this press
release.