ECI International, Inc. receives U.S. $4 million equity investment and acquires U.S. $9 million subsidiary from Rubywell Pty Ltd., Australia

Business Wire, Sept 13, 1995

WASHINGTON--(BUSINESS WIRE)--Sept. 13, 1995--ECI International, Inc. (formerly AMEX:ECI) (the "Company") today announced Rubywell Pty Limited of Brisbane, Australia ("Rubywell"), a technology research organization, has consummated its acquisition of 4 million shares of Series "B" preferred stock ("Preferred Stock") of the Company in exchange for transferring to the Company all of the issued and outstanding common stock of Rubywell's technology subsidiary.

Separately, Rubywell has arranged for a U.S. $4 million investment to be made to the Company, with U.S. $1 million to be paid within 15 days and the balance of U.S. $3 million in the form of a promissory note, payable within one year. The Company's Preferred Stock provides five votes per share and will convert into 20 million shares of common stock, subject to shareholder approval.

Rubywell will own approximately 67% of the issued and outstanding common stock in the Company while the Company's existing shareholders retain approximately 33% of the common stock.

Rubywell earlier expended over U.S. $9 million in research and development investment to commercialize a proprietary "Modular Power Unit," or MPU, which was then exclusively conveyed to the subsidiary acquired by the Company. The Modular Power Unit weighs about 500 pounds and consists of two gas turbine (jet) engines developing 1,300 horsepower which is totally automated and modularized, and is fully certified to meet aviation engine reliability requirements.

The Company and Rubywell believe the MPU product has advanced, proprietary features permitting its adoption in many cost effective marine and harsh environmental applications, replacing less reliable piston engines.

On an unaudited, pro-forma, consolidated basis, the Company projects that it will have in excess of U.S. $10 million in net assets and U.S. $1.2 million in royalty earnings. The Company expects to benefit from its existing business combination by consolidating operating revenues which are expected to commence within the next quarter.

The Company's Board of Directors is preparing a proxy for the annual meeting of share-holders to be held Nov. 15, 1995 to approve this transaction, to amend the articles of incorporation, to permit the conversion of the Preferred Stock into common stock subject to Rule 144, and to elect five (5) directors nominated by Rubywell, two of whom shall be independent of management or "affiliates," as that term is defined under the Securities Exchange Act of 1934, as amended.

The Company also announced that it had extended a Letter of Intent to acquire Tokan Holdings Inc. acting as agent for two Australian private finance companies. Tokan's Australian affiliates own and manage loan portfolios. Each holds over 100 loans with minimum 10 year terms, personally guaranteed by high net worth individuals or corporations.

On Sept. 11, 1995 Tokan withdrew its U.S. $12 million cash tender offer for control of Barlile Corp. Ltd., a listed company trading on the Australian Stock Exchange, because of apparent material changes in Barlile's assets and directors.

On Dec. 16, 1994 the Company and the American Stock Exchange ("ASE") agreed to a suspension of trading in ECI's common stock by reason of notice of cancellation of the license to Pegasus Technologies Inc. for aircraft inspection technology, at that time the Company's principal asset. The Company made repeated attempts to maintain listing through acquisition of qualified companies, but the ASE notified the Company, on June 26, 1995 of its decision to remove the Company's common stock from listing and registration on the ASE.

The ASE stated that it would proceed with filing an application under Rue 12d2-2 with the Securities and Exchange Commission to strike the Company's common stock from listing and registration on the ASE.

The decision was based primarily on the Company's record of losses; its deficits in working capital and shareholder equity; the disposition of all the Company's operating assets and the Company's inability to satisfy the provisions of its listing agreement with the ASE. The Company has since determined not to appeal that decision.

The company now intends to pursue listing and trading on NASDAQ as a result of its consummated and proposed business combinations. Since the Company anticipated that a market for its common stock might develop over-the-counter, the Company had its application for listing on the NASD bulletin board approved on July 28, 1995, but trading (under the symbol "ECTI") had not commenced as of Sept. 12, 1995.

CONTACT: ECI International, Inc.

Wallace N. Seward, 202/296-2333