Yangtze Telecom Corp.
TSX VENTURE : SMS

Yangtze Telecom Corp.

August 26, 2005 18:59 ET

Yangtze Telecom Private Placement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 26, 2005) - Yangtze Telecom Corp. (TSX VENTURE:SMS) is pleased to announce that it is negotiating a non-brokered private placement totaling up to 15 million shares at $0.18 per share with accredited investors. The placement was initiated by Kevin He, a director of Yangtze, who oversees the various businesses of Yangtze's 65% owned subsidiary, China United Telecom Technology Company Ltd. ("UTT"). Mr. He indicates that he has received commitments totaling $1.8 million to date. The gross proceeds of up to $2.7 million from the placement are to be used to increase Yangtze's ownership of UTT wherein such investment will be used to further develop the businesses of UTT, particularly the Credit Management Services business and Distance Learning.

Terms of the financing were settled recently after several weeks of discussion. This financing is subject to regulatory approval. The securities to be issued will be subject to a minimum four month hold period from the date of closing.

"We are pleased to have successfully secured this serious commitment from Chinese based investors who believe in UTT's businesses," said Emily Chen, President of Yangtze Telecom. "This financing allows Yangtze to seize upon the Credit Management Services business opportunities by having the resources to reach a critical mass of customers; plus sufficient resources to continue the roll out of UTT's distance learning programs; and monies for strategic acquisitions."

About Yangtze Telecom Corp.

Yangtze Telecom Corp. is focused on developing and implementing business and consumer applications utilizing a combination of voice, the Internet and wireless data communication technologies. The significant applications developed to date are the Credit Management System, Distance Learning business and Voice Information Services.

The TSX Venture Exchange has not reviewed, and does not accept responsibility for the adequacy or accuracy of, the contents of this press release.

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