Nam Tai Electronics invests in China's TCL Holding Company

World IT Report, Apr 10, 2003

Electronics design and manufacturing service provider Nam Tai Electronics has entered an agreement with China's state-owned Huizhou Investments Holdings Company Limited ("Huizhou Investments") to acquire a 6% equity interest in the parent company of the TCL Group of Companies, TCL Holdings Corporation Ltd. for a consideration of approximately USD $12 million. Subject to the satisfaction of a number of conditions and government approval, the transaction is expected to close within sixty days.

Huizhou Investments is a wholly-state owned limited liability company registered in Huizhou, the Peoples Republic of China. Huizhou Investments' decision to reduce its interest in TCL Holdings is consistent with the PRC government's policy to reduce its ownership interest in numerous state-owned enterprises.

Nam Tai in October 2000 acquired a 5% indirect interest in Huizhou TCL Mobile Communication, a member of the TCL Group of Companies. Huizhou TCL Mobile Communication is one of China's largest companies engaged in the design, manufacturing, sales and marketing of mobile phones. It has production facilities in the PRC, and is one of 27 authorized GSM handset manufacturers and one of 20 authorized CDMA handset manufacturers in the PRC.

For the year ended December 31, 2001 Huizhou TCL Mobile Communication anticipates net income of not less than $36 million. Huizhou TCL Mobile Communication is also a customer of Nam Tai, as it currently purchases rechargeable battery packs from BPC (Shenzhen) Co., Ltd. -- a joint venture company owned by Nam Tai and Toshiba Battery Co., Ltd.

The TCL Group is controlled by TCL Holdings, a PRC state-owned enterprise that has extensive sales and distribution channels in China. TCL Holdings' scope of business includes the import and export of raw materials, the design manufacturing and sales and marketing of telephones, VCD players, color television sets, mobile phones and other consumer electronic products.

With this transaction both Nam Tai and the TCL Group aim to create a strategic partnership which will allow the parties to support and co-ordinate with each other to expand and develop new business in the manufacturing and marketing of consumer electronic products, including telecommunication products in the growing domestic China market and globally. -(World IT Report)