Globalworth Regulatory News (GWI)

21 Jan 2008 07:00

Genesis Worldwide Inc. Enters Into Strategic Multi-Million Dollar Licensing Agreement

Company Achieves Major Milestone with Licensing Agreement for Three

Plants in Russia

MISSISSAUGA, ON, Jan. 21 /CNW/ - Genesis Worldwide Inc. ("Genesis" or the "Company"), , an industry leader in "green" structural building technologies using light steel, is pleased to announce that it has entered into the largest licensing deal in the Company's history, significantly enhancing the Company's presence in Europe.

Genesis recently entered into a License and Services Agreement (the "Agreement") with Greenford Trading Limited ("Greenford"), a newly formed British Virgin Islands subsidiary of ArianaInterProject, a Russian international investment and development company. The Agreement calls for the building of three light steel panel manufacturing plants in Russia over the next two and a half years. The factories will produce light steel paneled structures using the Genesis Solution, which includes leading-edge software, industrial equipment, hardware, processes and engineering services.

Under the terms of the Agreement, Genesis will earn initial revenue of US$4.0 million from licensing the Genesis technology, the sale of industrial equipment and hardware, and various training and consulting services required for the commissioning of the first plant. The Company will earn similar revenue from the commissioning of each of the two additional plants, which are projected to be commissioned by July 1, 2009 and July 1, 2010, respectively, with the revenue recognized at such time. Genesis will also earn a minimum of US$4.1 million in royalty fees over the next five years.

Greenford will be the exclusive provider of Genesis building systems in the Central Federal District within the Russian Federation, and will maintain exclusivity as long as annual minimum gross sales targets are achieved. This Agreement is for a five-year period and will automatically renew for an additional five years.

This transaction is the result of months of intensive discussion and negotiation, during which Genesis developed an in-depth understanding of the numerous opportunities in the Russian market.

Genesis President and CEO, Vince Mifsud, noted the significance of this Agreement. "We fully recognize the market opportunities available in this region due to the robust Russian economy and on-going construction boom. This is a major achievement for us. It positions Genesis to lead the way in light steel construction in the region and expands our strategic footprint in the European market."

Latest statistics from The World Fact Book, CIA, states that Russia has experienced average GDP growth of 6.7% for the last eight years. The Russian Ministry of Economic Development and Trade predicted that GDP would grow 7.3% in 2007. The U.S. Dept. of State (September 2007 issue of Bureau of European and Eurasian Affairs) stated that construction was the fastest growing sector of the Russian economy, expanding 14% in 2006. This growth could provide a significant opportunity for Genesis going forward.

The target date for commissioning of the first plant is the end of September 2008. The plant will be built in the town of Stupino, 80 kilometers south of Moscow. The Town of Stupino recently announced that 200 hectares of land have been assigned to ArianaInterProject to start a residential and commercial development using Genesis technology.

Greenford Managing Partner, Victor Kuchiev, commented, "We look at our new partnership with Genesis with excitement. It is our intention to make Genesis the preferred construction method for residential and light commercial buildings in suburban developments around Moscow." Mr. Kuchiev added, "We want to create a more modern environment to replace some of the older communities built during the Soviet era."

Genesis Vice President of Business Development, Mag Mostafa, said that Genesis is also tremendously excited by this opportunity. "Russia is a major steel producer and will only benefit from utilizing light steel technology," said Mr. Mostafa. "It is clear from our ongoing discussions that ArianaInterProject is very open to western ideas and intends to play a leading role in Russia with regard to new technology, thus creating the opportunity for a strong partnership with Genesis going forward."

The 2014 Winter Olympics will be held in Sochi, Russia, which brings further licensing opportunities for Genesis as the demand for rapid, high-quality and environmentally sound construction grows in the region.

About Genesis Worldwide Inc.

Genesis develops and licenses structural building technology aimed at the residential, commercial and institutional building markets. Genesis offers licensees a turn-key solution enabling them to custom design, manufacture and install complete light steel building structures. The Genesis Solution encompasses engineered processes and materials that are environmentally sustainable or "green". Genesis is headquartered in Mississauga, Ontario, Canada and currently has eight licensees worldwide. For additional information about the Company, visit www.genesisworldwide.com.

Forward-Looking Information

Certain statements contained in this press release constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to the Company's future outlook and anticipated events or results and, in some cases, can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities. While the Company considers these assumptions to be reasonable based on information currently available to us, they may prove to be incorrect. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what we currently expect. These factors include changes in market and competition, governmental or regulatory developments and general economic conditions. Additional information identifying risks and uncertainties relating to the Company, its business and prospects are contained in Genesis' prospectus filed with the Canadian securities regulatory authorities, available at www.sedar.com.

For further information: Genesis Worldwide Inc., Catherine Smyth, Manager, Investor Relations, Tel: (905) 285-9909, ext. 302 or Canaccord Adams, Robert Finlay, Erin Needra, Tel: +44 020 7050 6500 (GWI.)