Tengtu International Corp. announced today that it has entered into an agreement with the executor of the estate of Fan Qi Zhang (the Estate) concerning the registration under U.S. securities laws of 15 million common shares of Tengtu International Corp. owned by the Estate.
Tengtu International Corp. is a developer, marketer, distributor, and integrator of distance learning solutions and e-education software. Its agent, Tengtu China, has been chosen by China's Ministry of Education to be the operating partner in the deployment of China's national education portal and distance learning network (CBERC). The objective of this system is to make computerized education available to 250 million students in China's primary and secondary schools. Tengtu International Corp. and its subsidiaries employ more than 400 people in offices in Asia and North America. Tengtu has more than 35,000 schools and 17.5 million students connected to its information network in China.
The 15 million shares to be registered under this agreement represent 50% of the 30 million shares paid to Fan Qi Zhang under a restructuring agreement approved by shareholders at the Company's annual meeting on January 20, 2004 and consummated on April 5, 2004. Mr. Fan Qi Zhang served as Chairman and CEO of Tengtu China, Tengtu International's Beijing-based agent. He passed away in October of last year.
In accordance with instructions governing the disposition of the Estate, proceeds from the sale of these shares are to be used to satisfy "funding difficulties" of Tengtu China. As at March 31, 2004, Tengtu China owes approximately US$9 million for bank loans used to fund Tengtu United's operations and approximately US$18.5 million to Tengtu International. An escrow agent, acting on behalf of the Estate, will hold the 15 million registered shares for resale upon the instructions of Tengtu International Corp. The Company will consider market conditions in instructing the escrow agent in the disposition of these shares.