Nov 30 2008
Geneva Acquisition Corp. (NYSE Alternext US: GAC; GAC-WT; GAC-U) (“Geneva”) today announced that it has entered into a definitive agreement for acquiring privately held Global Hi-Tech Industries Ltd. (“GHIL” or the “Company”), an Indian integrated steel producer. With its state-of-the-art manufacturing facility built on approximately 138 acres of land within the last five years, GHIL is a rapidly growing company in an important and expanding infrastructure segment.
The Company has a solid track record of growth and financial success. Revenues grew from $6 million in FY (3/31) 2006 to $50 million in FY (3/31) 2008, while EBITDA during the same period rose from $1.12 million to $10.4 million. The Company’s current production capacity of 96,000 metric tons per annum (MTPA) is expected to grow more than three-fold to 300,000 MTPA within 18 months following closing. GHIL manufactures three products: (1) structural steel, which is finished, high value-added ‘long’ steel used as beams, columns, and joists; (2) billets, which are intermediate stage products later made into structural steel; and (3) sponge iron, a high ferrous content material produced in either lump or pellet form which is a raw material alternative to scrap steel.
Approximately 57% of both billet and sponge iron production is currently sold to other steel plants, but as capacity expands all production of these two intermediate products is intended to be utilized internally. The Company is well situated geographically on the west coast of India enabling easy sea and rail transport, has access to a large and skilled labor pool, and presently has limited local competition.
The Company’s website address is www.ironglobal.com. Demand for structural steel in India has accelerated over the past several years, driven by the growth of the domestic construction industry and supported by both central and state government initiatives for infrastructure development, making this market relatively resistant to economic downturns. Nationwide initiatives have been undertaken by the central government for the expansion, modernization and upgrading of the transport infrastructure, the railroad system, and the electric power distribution system. In addition, the rise of India’s ‘middle class’ has fueled the growth of new full-service townships, shopping malls, and the hospitality industry.