|How do people sleep at night touting this old Alan V. Phan.Hartcourt connected company|
Hartcourt to Purchase 51% of Elephant Talk, a Premier Telecom Services Company in China and Hong Kong Agreement is First Step in Rolling Out Services Via ETNS'
$450 Million Fiber Optic Network in China LOS ANGELES, Jan. 24 /PRNewswire/ -- The Hartcourt Companies, Inc. (OTC Bulletin Board: HRCT; Frankfurt: HCT) www.hartcourt.com, announced today that it has agreed to purchase 51% of Elephant Talk, a brand-name provider of long-distance telecom services in China and Hong Kong. In their most recent annual financial statement, audited by Deloitte, Touche, Tohmatsu, Elephant Talk showed total revenue of HK$ 202 Million (US$ 26 Million) and a net profit of HK$ 7.3 Million (US$ 0.94 Million). The shareholders of Elephant Talk are also joint venture partners with China Huandao Group in the ETNS project in China. The joint venture has acquired a fiber optic network measuring 8,307 kilometers that runs through the economic heartland of eastern China (PRC) and has obtained a nation-wide ISP and IP phone license in China to provide network services over this extensive backbone. ETNS is expanding the global coverage of its network by developing a next generation of strategically located, fault-tolerant facilities -- Internet eXchange Centers (IXC) for network and facilities outsourcing. ETNS now has IXCs in Hong Kong, Shenzhen, Guangzhou, Shanghai and Beijing. ABN-AMRO, a prestigious international investment banking group, recently placed an estimated valuation range of US$450 Million to US$650 Million on the ETNS network. Hartcourt has agreed to invest in this broadband network and to assist ETNS evolve into a publicly traded entity via an IPO or merger. Mr. Russelle Choi, Chairman & CEO of Elephant Talk, said, "We have chosen Hartcourt to be our partner in developing Elephant Talk and other infrastructure projects in China because they have proved to be the 'can-do' people. We share the same vision, the same management philosophy and the same positive attitude. Together with Hartcourt, we believe in the ultimate success of our mission." Dr. Alan Phan, Hartcourt's Chairman commented, "Elephant Talk is our first step in creating a major broadband network for voice and data communications in China. Through our partnership with Innostar, Elephant Talk has the potential to become a leader among the next generation of Chinese telecommunications companies, generating strong revenue and profit from IP phone services. "Hartcourt's major objective in structuring this transaction is the operation and full implementation of ETNS' 8,300 km fiber optic network connecting 15 major Chinese cities. Considering the total valuation of the network and its related services, estimated at US$450 Million, this will be a significant undertaking and its success will be a major factor in determining Hartcourt's future valuation." Hartcourt CEO, Dr. Charlie Q. Yang stated, "Upon completion of this transaction, we will be able to include Elephant Talk's revenue and net income onto Hartcourt's consolidated balance sheet. We believe that investors will understand that given factors such as lower operational costs and stronger regulatory control in China, telecom companies such as Elephant Talk typically enjoy much high market valuations as the result of achieving higher profit margins than those achieved by similar companies operating in the western world. We anticipate improved performance at Elephant Talk and ETNS as we move further into the expansion of their services into additional markets in China." About Elephant Talk Based in Hong Kong, Elephant Talk is one of the leading international long-distance service providers to China and Hong Kong. Established in 1995, it holds a number of licenses including US FCC 214, HK ETS and ISP PNETS allowing it to provide voice, data transmission like IDD, pre-paid calling card and ISP services. Its customers include major telecom carriers in the U.S. including AT&T, Cignal Global, Frontier, and MCI Worldcom and from Hong Kong: New World Telephone, New T&T, and MCI Asia. Additional information on Elephant Talk can be obtained via the Company's web site: www.elephanttalk.com. About ETNS Originally established as Elephant Talk Network Services Ltd. in July 1999, to take advantage of Elephant Talk's existing customer base, business relationships, and technical expertise in developing Internet based communication services, ETNS is a leading provider of Internet solutions to commercial enterprises requiring high bandwidth, business-critical operations in the PRC (China). Headquartered in Hong Kong, the company holds ETS, ISP PNETS, and External FTNS licenses and has been engaged in the provision of broadband Internet access and outsourcing services for international and multi-national businesses. Through a joint venture with China Huandao Group, a unit of the People's Liberation Army of China, ETNS acquired an 8,300 km fiber optic network. The network, which connects over 15 major cities in eastern China, enables ETNS to provide broadband connectivity, co-location server hosting, IP phone services, collaborative systems management and other Internet technology services to ISPs, ICPs, and ASPs. A complete roll out of all these services will begin in March 2001. In 2000, ABN-AMRO completed a valuation of the network, giving ETNS and its related services, an estimated value from $450 Million to $650 Million, with EBIT reaching $262 Million in the fourth year of operation. Additional information regarding ETNS is available at the company web site: www.etns.net. About Hartcourt The Hartcourt Companies is a holding and development company that is building a network of Internet and telecommunication service companies in The People's Republic of China (China), including Hong Kong, in partnership with Chinese entrepreneurs as well as Chinese government-owned entities. Hartcourt's business goal over the next three years is to complete a series of IPOs or spin-offs focused on four main divisions: StreamingAsia, the streaming content (video/audio) web-casting and web hosting leader in Hong Kong; SinoBull Financial Group, the multi-media financial data provider and online securities trading platform; the Broadband ISP and Internet Infrastructure Group; and Hartcourt Capital Inc., the E-Finance transactions platform offering online banking, securities, insurance, equipment leasing, credit, and B2B transaction settlements. Detailed information on Hartcourt can be obtained via the company's Web site: www.hartcourt.com. Forward-looking statements Certain statements in this news release may constitute "forward looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Such forward looking statements involve risks, uncertainties and other factors, which may cause the actual results, performance or achievement expressed or implied by such forward looking statements to differ materially from the forward looking statements.
SOURCE The Hartcourt Companies, Inc.