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Longwei
Petroleum Investment Holding Announces Closing of Private Placement for $14.8
Million
Capital
Used to Establish Inventory for New Storage Facility Which Is Expected to Add
$40 Million in Revenue and $6 Million in Net Income
TAIYUAN
CITY, China -- (PR NEWSWIRE-ASIA) – Oct. 29, 2009 -- Longwei Petroleum
Investment Holding Ltd. (OTC Bulletin Board: LPIH) (“Longwei”), announced today
that it has completed a $14.8 million private placement with accredited
investors to provide funding for the completion of its Gujiao Oil Depot facility
located in Gujiao City, Shanxi Province, China. The company intends to use the
proceeds to purchase inventory and ancillary equipment for the Gujiao facility,
that has 70,000 metric tons of capacity for fuel oil storage, and to finalize
the railway connection to the depot.
The
additional facility is expected to come online January of 2010 and is expected
to generate approximately $40 million in revenue and $6 million in net income
during the fiscal year ending June 30, 2010.
“This
funding will allow us to complete construction at our Gujiao oil storage
facility, which is strategically located in a heavy industry area where there is
strong demand for fuel,” said Cai Yongjun, chairman and chief executive officer
of Longwei. “Our new facility will position us to better serve the large
industrial plants, mining operations, and transportation fleets operating in the
Gujiao industrial zone.”
Under the
structure of the private placement, Longwei sold 13.5 million Series A
Convertible Preferred Shares and Warrants to 36 accredited investors. The
warrants are valid for a term of three years and are exercisable at a price of
$2.255 per share. The Series A Convertible Preferred Shares are convertible into
shares of Longwei’s common stock at a 1 to 1 ratio and have a conversion price
of $1.10. Longwei will be required to file a registration statement
for the securities sold in the private placement within 60 days.
Longwei
and the investors entered into a Make Good Escrow Agreement with insiders of
Longwei, who placed 13,499,274 shares of Longwei’s common stock into escrow, to
be distributed to the investors, based on a calculation, if Longwei fails to
attain “adjusted net income” of $23,900,000 for the year ended June 30, 2010.
Adjusted net income is net income after tax and is also exclusive of any
non-cash adjustments related to the private placement.
National
Securities Corporation, a subsidiary of National Holdings Corporation, acted as
lead Placement Agent in the transaction.
The
securities issued in the private placement have not been registered under the
United States Securities Act of 1933 as amended or the securities laws of any
other jurisdiction. Until they are registered, these securities may not be sold
by investors in the United States, except pursuant to an effective registration
statement or an applicable exemption from the registration requirements. For
more detailed information on this financing, refer to Longwei’s Current Report
on Form 8-K which will be filed with the Securities and Exchange
Commission.
About
Longwei Petroleum Investment Holding Limited
Longwei
Petroleum Investment Holding, Limited (the “Company”) is an energy company that,
through its subsidiaries, engages in oil and gas operations in the People’s
Republic of China (“PRC”). Oil and gas operations consist of
transporting, marketing and selling finished petroleum products. The
Company’s headquarters and primary facilities are located in Taiyuan, Shanxi
Province (“Shanxi”). The Company purchases diesel, gasoline, fuel oil and
kerosene (the “Products”) from various petroleum refineries in the PRC. The
Company is 1 of 5 licensed intermediaries in Shanxi that operates its own large
scale storage tanks and has the necessary licenses to operate and sell Products
not only in Shanxi but throughout the entire PRC. The Company’s storage tanks
have the largest storage capacity of any non-government operated entity in
Shanxi. The Company seeks to earn profits by selling its Products at
competitive prices to large scale gas stations, coal plants and other power
supply customers and small, independent gas stations. The Company also earns
revenue by acting as a purchasing agent for other intermediaries in Shanxi and
through the sale of diesel and gasoline at a gas station located on the
Company’s property in Taiyuan.
For
further information on Longwei Petroleum Investment Holding Limited, please
visit http://www.longweipetroleum.com.
You may register to receive Longwei Petroleum Investment Holding Limited's
future press releases or request to be added to the Company's distribution list
by contacting Dave Gentry at http://www.RedChip.com.
About
National Holdings Corporation
National
Holdings Corporation is a holding company for National Securities Corporation,
vFinance Investments, Inc., EquityStation, Inc., National Asset Management,
Inc.; and National Insurance Corporation. National Securities, vFinance and
EquityStation are broker-dealers registered with the SEC, and members of FINRA
and SIPC. vFinance is also a member of the NFA. The three principal lines of
business of the broker-dealers are offering full-service retail brokerage;
providing investment banking, merger, acquisition and advisory services to
micro, small and mid-cap, high-growth companies; and trading securities,
including making markets in over 3,500 micro and small-cap stocks, distributing
direct market access platforms and providing liquidity in the United States
Treasury marketplace. National Asset Management is a federally registered
investment advisor. National Insurance provides a full array of fixed insurance
products to its clients. For more information, please visit our websites at
www.nationalsecurities.com
and www.vfinance.com.
Forward-Looking
Statements
Certain
statements contained herein constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on current expectations, estimates and
projections about Longwei’s industry, management's beliefs and certain
assumptions made by management. Readers are cautioned that any such
forward-looking statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict. Because such statements involve risks and uncertainties, the actual
results and performance of the Company may differ materially from the results
expressed or implied by such forward-looking statements. Given these
uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. Longwei’s operations are conducted in the PRC and,
accordingly, are subject to special considerations and significant risks not
typically associated with companies in North America and Western Europe. These
include risks associated with, among others, the political, economic and legal
environment and foreign currency exchange. The Company's results may be
adversely affected by changes in the political and social conditions in the PRC
and by changes in governmental policies with respect to laws and regulations,
anti-inflationary measures, currency conversion, remittances abroad, and rates
and methods of taxation. Other potential risks and uncertainties include but are
not limited to the ability to procure, properly price, retain and successfully
complete projects, and changes in products and competition. Unless otherwise
required by law, the Company also disclaims any obligation to update its view of
any such risks or uncertainties or to announce publicly the result of any
revisions to the forward-looking statements made here. Readers should review
carefully reports or documents the Company files periodically with the
Securities and Exchange Commission.
Contact:
At
the Company:
Jim
Crane, Chief Financial Officer
U.S.
Office +1 617 699 6325
P.R.C.
Tel. +86 152 0120 8012
Investor
Relations:
Dave
Gentry
RedChip
Companies, Inc.
407-644-4256,
Ext. 104
info@redchip.com
http://www.RedChip.com
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