MGCC Investment Strategies Inc. (OTCBB:MGIS), to be called Wonder Auto Technology, Inc., ("the Company"), whose subsidiary Jinzhou Halla Electrical Equipment Co., Ltd. ("Halla") designs, develops, manufactures and sells automotive electrical parts and is the second largest seller of automotive alternators and starters in China, today announced that, on August 23, 2006, its subsidiary, Wonder Auto Limited, had entered into a share purchase agreement to acquire 50% of the total outstanding shares of Jinzhou Dong Woo Precision Co. ("Dong Woo") from Winning International Development Limited. The remaining 50% of Dong Woo will continue to be held by Shuzi Quan and Zhenshu Lee, both citizens of Korea. The purchase price for the 50% stake in Dong Woo is $4.85 million in cash, $2.43 million to be paid within one month of the signing of the share purchase agreement and the remaining $2.42 million to be paid dependent on and proportionate to Dong Woo achieving a certain net income target for the fiscal year of 2006.
Headquartered in Jinzhou City, Liaoning, China, Dong Woo designs, manufactures and distributes automotive components, parts, machinery and electronic equipment and provides information services. Its major products are regulators and rectifiers for automotive alternators.
Commented Quingjie Zhao, the Company's President and CEO, "We are very pleased to have reached this agreement with Dong Woo. It will strengthen our relationship with this important supplier to our alternator business. The result will be not only to the mutual benefit of Wonder Auto and Dong Woo but to our automotive customers as well."
In a separate event, the Company's subsidiary, Halla entered into a credit facility agreement with the Bank of China under which the bank will provide a RMB 80 million, (approximately $10 million), revolving credit facility. The facility expires on August 8, 2007. Halla's obligations under the facility will be secured by a mortgage on Halla's property.
About Wonder Auto Technology, Inc.
Wonder Auto Technology, Inc., through its subsidiary, Jinzhou Halla Electrical Equipment Co., Ltd., designs, develops, manufactures and sells automotive electrical parts and is the second largest seller of automotive alternators and starters in China. The Company's products are suitable for various types of automobile. Most of its products are used in cars in the sedan category, especially cars with smaller engines with displacements below 1.6 liters. The Company's customers include Beijing Hyundai, Beijing Daimler Chrysler, SAIC GM WuLing, FAW Auto Group, Chery, Geely and Tianjin FAW XiaLi Automobile Co., as well as automotive engine suppliers such as Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co. Wonder Auto is a Nevada corporation with its manufacturing subsidiary Halla and its corporate headquarters located in Jinzhou City, Liaoning, China.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of the Company's management and are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: business conditions in China, changing interpretations of generally accepted accounting principles; legislation or regulatory environments, requirements or changes adversely affecting the businesses in which the Company is engaged; fluctuations in customer demand; management of rapid growth; intensity of competition from other providers of auto components; timing approval and market acceptance of new product introduction; general economic conditions; geopolitical events and regulatory changes, as well as other relevant risks not included herein. The information set forth herein should be read in light of such risks. The Company does not assume any obligation to update the information contained in this press release.