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GC China Turbine Corp. Plans Merger

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turbines_1(Oct. 9, 2009 - Guest Contributor) Editor's note: The following article was written by Zou Soueidan of GeoInvesting. The "GeoTeam" of researchers and analysts uses fundamental criteria to analyze micro- and small-cap stocks.

On September 30, 2009, GC China Turbine Corp. (OTC:GCHT) entered into a voluntary share exchange transaction with wind turbines manufacturer GC Nordic based in China pursuant to a Share Exchange Agreement. 

Merger Details:

  • Immediately after the Exchange Transaction and automatic notes conversion, the Company will have 52,570,015 shares of common stock issued and outstanding.
  • The consummation of the Exchange Transaction is also contingent on:

(a) a minimum of $ 8,000,000 being subscribed for, and funded into escrow, by certain accredited and institutional investors  for the purchase of 6,400,000 shares of the Company’s Common Stock.

(b) the closing of a debt financing transaction with Clarus Capital Ltd. for the aggregate amount of $1,000,000, which shall be convertible into the Company’s Common Stock at $2.00 per share and have a 2 year repayment.

  • Estimated Total diluted share count: 61 million

Company Details:

  • GC Nordic is the only manufacturer of 2-bladed wind turbine systems in China.
  • Initial sales efforts have been rewarded with contracts of approximately $128 million.
  • GC Nordic's technology is based on a 10 year, $75 million research and development investment by the government of Sweden. The development project that created the technology has been operating for 10 years with 98% output availability during this period.
  • The wind power industry in China is booming. Chinese government guidelines mandate that 30,000 MW of wind power be installed by 2020.
  • The Chinese government has mandated that 70% of wind components be sourced domestically by 2010.
  • Currently, GC Nordic is executing three contracts of 50 units with three entities.

Source: Marketwire (October 6, 2009), SEC Form 8K (October 6, 2009)

Financial forecasts provided by the Company:

 

2008 Reported 2009 Estimate 2010 Estimate 2011 Estimate 2012 Estimate
Revenue $3.1 M $28.7 M $87.2 M $199. M $536.0 M
Net Income (25% Tax Rate) -$400 T $4.1 M $14.7 M $30.4 M $89.0 M
EPS a n/a $0.07 $0.24 $0.50 $1.46

a The Company did not provide EPS estimates.


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