DALIAN, China, May 26 /PRNewswire-Asia/ -- Fushi Copperweld, Inc., (the
'Company' or 'Fushi') (Nasdaq: FSIN), the leading global manufacturer and
innovator of copper-clad bimetallic wire used in a variety of
telecommunication, utility, transportation and other electrical applications,
today announced that it has entered into a settlement agreement and an escrow
agreement with Kuhns Brothers whereby both parties have agreed to settle and
resolve the dispute between both parties.
The total amount Kuhns Brothers can recover from the Company is $7.0
million and the judgment shall be satisfied by January 15, 2010. Under the
terms of this settlement agreement, the Company shall (i) deliver to Kuhns
Brothers the cash component of an escrow account in the amount of USD$1.0
million plus accrued interest, held in escrow (the 'Escrow Assets'), (ii)
deliver to Kuhns the stock component of the Escrow Assets comprised of 100,000
shares of the Company's common stock, and (iii) deposit a certificate for 2.2
million shares of the Company's common stock into a newly established escrow
account with Continental Stock Transfer & Trust (the 'Escrow Shares') along
with an executed stock power in blank, pursuant to the escrow agreement. The
parties agreed to deposit a total of 2.2 million shares of common stock in the
event of a potential decline in the Company's stock price. However, Kuhns can
only receive proceeds from the sale of such number of Escrow Shares necessary
to satisfy the $7.0 million judgment, after reducing the judgment by the
Escrow Assets. Any Escrow Shares remaining after full satisfaction of the
Judgment shall be released to the Company and cancelled.
The Company has already accrued $7.2 million for this litigation
settlement as a contingent liability in the second quarter of 2008 and
allocated the amount between equity and expenses accordingly. The Company
reaffirms comfort with its second quarter adjusted fully diluted EPS estimate
of $0.21-$0.25 and that its profitability on an adjusted EPS basis, will
improve sequentially throughout 2009.
Mr. Li Fu, Chairman and Chief Executive Officer of Fushi Copperweld,
commented, 'We are pleased to put this matter behind us and continue to
concentrate on the execution of our strategic initiatives for growth. We
remain optimistic about the overall health of the bimetallic industry as well
as the prospects for our company.'
This settlement is described in greater detail in the Company's current
report on Form 8-K that has been filed with the SEC today.
About Fushi Copperweld, Inc.
Fushi Copperweld, Inc.
