Bethesda, May 28, 2014 (GLOBE NEWSWIRE) -- India Globalization Capital, Inc. (NYSE MKT: IGC), announced that it has executed a letter of intent to acquire Golden Gate, a Hong Kong based trading company. This acquisition is expected to close in the current quarter, subject to the execution of a definitive acquisition agreement, completion of satisfactory due diligence and final approval by the board of IGC. The acquisition will not require a vote of the shareholders of IGC and is expected to be accretive to earnings immediately. Golden Gate was profitable in FYE March 31, 2014 with unaudited revenue of approximately $10 million.
IGC will acquire 51% of the Hong Kong based entity for 1,209,765 shares of IGC common stock. The IGC shares are to be paid out in four tranches over three years. 205,660 shares will be paid at closing and the remaining shares paid based on successfully meeting earnings objectives for FYE March 31, 2015, 2016 and 2017.
CEO Ram Mukunda stated, "I am pleased to welcome the team in Hong Kong. With their expertise and India potentially opening up again with the election of a new pro business Prime Minister, we have a potential opportunity to drive growth both in revenue and in earnings. This acquisition is expected to strengthen our current businesses." Mukunda added. "We continue to make steady progress developing our business in the legal cannabis and solar energy areas and expect to announce developments soon."
Consummation of the transactions contemplated by the letter of intent is subject to the negotiation and execution of a definitive acquisition agreement. There can be no assurance on whether or when IGC and the Golden Gate will be able to come to a final agreement or as to the terms thereof.
About IGC:
Based in Bethesda, Maryland, India Globalization Capital, Inc. is engaged in the beneficiation, trading and rental industries in the U.S., China and India. The Company's plan in the short term is to create cash flow from existing assets and in the medium term to expand its asset base through opportunistic acquisitions. For more information about IGC, please visit IGC's website at http://www.indiaglobalcap.com.
Forward-looking Statements:
Some of the statements contained in this press release that are not historical facts constitute forward-looking statements under the federal securities laws. Forward-looking statements can be identified by the use of the words "may," "will," "should," "could," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "potential," "proposed" or the negative of those terms. These statements are not a guarantee of future developments and are subject to risks, uncertainties and other factors, some of which are beyond IGC's control and are difficult to predict. Consequently, actual results may differ materially from information contained in the forward-looking statements as a result of future changes or developments in our business, our acquisition and diversification strategy, our competitive environment, infrastructure demands, iron ore availability and governmental, regulatory, political, economic, legal and social conditions in, among other places, China and India.
Except as required by federal securities laws, IGC undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. Other factors and risks that could cause or contribute to actual results differing materially from such forward-looking statements have been discussed in greater detail in IGC's Form 10-Kfor fiscal year ended March 31, 2013, and in subsequent reports filed with the U.S. Securities and Exchange Commission.