SOURCE: China Tel Group, Inc.

July 15, 2008 12:23 ET

ChinaTel Group Signs Stock Purchase Agreement With Asia Special Situation Acquisition Corp.

IRVINE, CA--(Marketwire - July 15, 2008) - ChinaTel Group Inc. (OTCBB: CHTL) ("ChinaTel," "CHTL" or the "Company") is pleased to announce that on July 8, CHTL entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Asia Special Situation Acquisition Corp., a Cayman Islands corporation ("ASSAC").

George Alvarez, Chief Executive Officer of CHTL, stated: "On behalf of the board of directors, we are pleased to have the members of ASSAC as our long term partners and we look forward to creating value for all of our shareholders."

The Stock Purchase Agreement provides between $202 million and $270 million for the investment by ASSAC into ChinaTel. ASSAC is a Business Combination Company™ formed to make acquisitions of businesses located in Asia. Its common shares trade on the American Stock Exchange under the symbol "CIO." ASSAC maintains $115 million in trust, which is available for any business combination or acquisition approved by the holders of a majority of its publicly traded shares. In the event ASSAC consummates the transaction with ChinaTel, it will acquire not less than 51% of the issued and outstanding shares of Company Class A Common Stock at the time of closing through the purchase of either Class A Common Stock or a combination of Class A common stock and shares of ChinaTel's voting Series A Preferred Stock convertible into Company Class A Common Stock. The per share price for the Company's Class A Common Stock is $2.25 per share.

ASSAC is also to receive shares of Company Class B Common Stock in such amount that will assure that ASSAC receive 51% of the voting power of all classes of Common Stock of ChinaTel at the transactions close. Company Class B Common Stock votes at the rate of 10 votes per share. ASSAC's agreement to purchase ChinaTel's securities is subject to certain conditions, which includes completion of a satisfactory due diligence investigation (including legal confirmation of the renewed WiMAX license referred to below), securing shareholder approval for the transaction and raising funding in ASSAC (in addition to the amount maintained in trust) of not less than an additional $115 million.

ChinaTel, through its controlled subsidiary Trussnet USA Inc., has entered into a number of agreements associated with the operation and financing of a 3.5 GHz wireless worldwide interoperability for microwave access ("WiMAX") wireless broadband operation in 29 major cities (the "WiMAX Installations") throughout the People's Republic of China ("PRC"). The WiMAX Installations will be operated by CECT Chinacomm Communications Co., Ltd. ("ChinaComm"), a PRC company, under a renewed WiMAX license to be issued by the Ministry of Information Industry ("MII") of China. Upon consummation of ASSAC's purchase of a majority of ChinaTel's capital stock, an aggregate of $196 million shall be utilized by the Company to finance the installation and operation of the WiMAX Installations. The Company is obligated to provide funding to ChinaComm within 20 business days after the renewed WiMAX license is issued by the MII.

There can be no assurance that the renewed WiMAX license will be issued to ChinaComm or that the transactions contemplated by the Stock Purchase Agreement with ASSAC will be consummated.

About ChinaTel Group Inc. (OTCBB: CHTL)

ChinaTel Group Inc. owns Trussnet USA, Inc. ('Trussnet'), a telecommunications infrastructure engineering and construction firm with principal operations in mainland China and that has entered into a partnership with a Wholly Owned Foreign Enterprise (WOFE) in the Peoples Republic of China to build and deploy a 3.5GHz wireless broadband system in up to 29 cities across the PRC with and for CECT-Chinacomm Communications Co., Ltd. For more information visit

About Asia Special Situation Acquisition Corp.

Asia Special Situation Acquisition Corp. is a Business Combination Company™, or BCC™, formed for the purpose of acquiring all or a majority interest in one or more unidentified operating businesses, through a capital stock exchange, asset acquisition, stock purchase, or other similar transaction, including obtaining a majority interest through contractual arrangements. The Company intends to identify prospective acquisitions that are either located in Asia, provide products or services to consumers located in Asia, or invest in Asia. The Company's efforts to identify a prospective target business will not be limited to a particular industry or area in Asia, although the Company initially intends to focus its efforts on acquiring an operating business in the leisure and hospitality or financial services industries, that either invests in, is located in or provides products or services to consumers located in China. "Business Combination Company" and "BCC" are service marks of Maxim Group LLC.

Notice regarding forward-looking statements

This news release may contain forward-looking statements or information. Forward-looking statements or information include statements regarding the expectations and beliefs of management. Forward-looking statements or information include, but are not limited to, statements or information with respect to known or unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Forward-looking statements or information are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks and uncertainties relating to obtaining financing to meet the Company's current or future plans and other risks and uncertainties, including those described under "Risk Factors" in the Company's Annual Report on Form 10-KSB which is on file with the Securities and Exchange Commission, as well as the Company's other SEC filings. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information. The Company does not undertake any obligation to publicly release revisions to any "forward-looking statement," to reflect events or circumstances after the date of this news release, or to reflect the occurrence of unanticipated events, except as is required under applicable securities laws.

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