VANCOUVER, CANADA -- January 31, 2002 -- Nam Tai Electronics, Inc. (“Nam Tai” or the “Company”) (NASDAQ/NM Symbol: NTAI and NTAIW; CBOE Symbol: QNA) today announced that on January 25, 2002 Nam Tai entered an agreement with 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. (“TCL Holdings”) for a consideration of approximately USD $12 million, which will be financed internally from operating cash flows and existing cash on hand. 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 authorised GSM handset manufacturers and one of 20 authorised 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.
Following our earlier investment in Huizhou TCL Mobile Communication, Nam Tai is pleased to have the opportunity to increase its investment in the TCL Group of Companies, especially in the parent company TCL Holdings Company. We are looking forward to both parties achieving increased business and benefits to each other in the future as a result of this strategic partnership.
Nam Tai Electronics, Inc. is an electronics design and manufacturing service provider to some of the world’s leading original equipment manufacturers. Nam Tai manufactures telecommunication products, palm-sized PCs, personal digital assistants, linguistic products, calculators and various components including LCD modules for cellular phones, lithium ion rechargeable battery packs, transformers and LCD panels. The Company utilises advanced production technologies such as chip on board (COB), chip on glass (COG), surface mount technology (SMT), ball grid array (BGA), tape automated bonding (TAB), and outer lead bonding (OLB) technologies. Further information is available on Nam Tai’s web site at www.namtai.com.
Except for the historical information contained herein, matters discussed in this press release are forward-looking statements. For example, statements regarding increased business, expansion of business and development of new business are uncertain forward looking statements which are dependant upon many factors including the successful closing of the transaction, end-user demand for mobile phones in China and globally, and possible changes government policy in China. Other factors that might cause differences in these and the other forward looking statements, include, but are not limited to, those discussed in the Company’s reports filed with the Securities and Exchange Commission from time to time, such as the factors set forth in Item 1 “Description of Business – Risk Factors” in the Company’s Annual Report on Form 20-F for the year ended December 31, 2000.