Listed Companies' Announcement
FEDERAL INTERNATIONAL (2000) LTD
FEDERAL INTERNATIONAL SETS UP TRADING ARM IN SHANGHAI TO STRENGTHEN PRESENCE IN CHINA
September 20, 2002, Singapore -- Mainboard-listed Federal International (2000) Ltd ("Federal"), an established flowline control products distributor and service provider supporting the oil and gas and related industries in the region, today announced that its wholly-owned subsidiary, Federal Hardware Engineering Co Pte Ltd (FHE), has incorporated Federal International (Shanghai) Co Ltd ("FIS"). FIS will undertake the trading and procurement of specialized valves and other flowline control products within the Free Trade Zone in China.
"China has huge potential in oil and gas activities, especially with the anticipated robust growth in the country's vast industrial sectors. The setting up of FIS is therefore timely as we can strategically capitalise on the strong growth potential of the North Asian markets as well as the strength of major Chinese oil and gas companies – in their push towards both domestic and global expansion," said Mr K K Koh, Federal's Executive Chairman and CEO.
FHE will hold a direct 65% stake in FIS and another indirect stake of 25%, which will be held under Mr Deng Guan Qun, who is currently the GM of FHE's Marine Department. Mr Deng will also hold the balance 10% under his own name. FHE has granted Mr Deng a call option to acquire from FHE its beneficial interest in FIS at cost price. Should this call option not be exercised, FHE may exercise the put option granted by Mr Deng to sell him the 25% equity interest in FIS at cost price plus 10% interest per annum, commencing from the date of expiry of the call option until the date of exercise of the Put option.
The subsidiary will have an initial paid-up capital of US$200,000. This investment will be funded by internal resources and is not expected to have any material impact on the Group's consolidated earnings per share for FY2002.
None of the Directors or substantial shareholders of Federal has any direct or indirect interest in this transaction.
About Federal (International) 2000 Ltd
Federal is a value-added distributor and provider of turnkey EPC (engineering procurement & construction) solutions for the energy & infrastructure industries. Currently, the group is principally involved in the distribution of flowline control products (e.g. valves, structural steel, steel flanges/connectors and pipe fittings) for the oil and gas, power, chemical and pharmaceutical industries.
Federal has incorporated HP & T Products, Inc. (a Houston-based company) and acquired strategic stakes in KVC Co. Ltd (Japan) and KVC (UK) Ltd, companies which are involved in upstream activities such as research & development and, manufacturing of valves and valve-related products. By moving upstream into the design and manufacture of specialised valves and related products, Federal aims to be an integrated service provider and procurement specialist in the energy and infrastructure industries offering a complete one-stop service package.
Issued on behalf of Federal (International) 2000 Ltd
For further information, please contact:
Stratagem Consultants Pte Ltd
Gwen Ling/Tham Moon Yee/Florence Tan
Tel: 6227 0502/ Fax: 62275663
Email : email@example.com;
September 20, 2002
Submitted by Koh Kian Kiong, Director & Chief Executive Officer on 20/09/2002 to the SGX