KHDH Khd Humboldt Wedag International Ltd. (MM)

HONG KONG, Jan. 25 /PRNewswire-FirstCall/ -- KHD Humboldt Wedag International Ltd ("KHD") (NASDAQ:KHDH) announces that it will distribute to its shareholders the shares of Mass Financial Corp. ("Mass Financial"), a wholly-owned subsidiary of KHD, which has operated as the international merchant banking operation and represents certain financial services assets of KHD. KHD shareholders will receive one share of Mass Financial common stock for each share held of KHD common stock. There will be no tax cost to United States and Canadian shareholders as a result of the distribution and there will be no tax effect on either KHD or Mass Financial. The distribution will not substantially change the net worth or earnings of KHD for the year 2005 or the net worth of KHD going forward. Mass Financial intends to focus exclusively on the growth and development of the financial services, commodities trading and merchant banking business, and it will be seeking an international listing for its shares. Commenting, Michael Smith, President of KHD, said, "We are pleased to announce the distribution of our financial service assets to our shareholders. This will allow KHD to concentrate on the growth of our industrial and engineering services with technologies for cement production and coal and minerals processing, while giving the benefits of our financial services to our shareholders." The financial services business of Mass Financial requires substantially less capital than has been deployed in the past and new capital required for Mass Financial will come from employees and/or a placement of Mass Financial securities. KHD will provide a limited amount of capital by the exchange of certain assets for retractable preferred shares of Mass Financial. The assets will be sold to Mass Financial at fair market value. The value of those assets and the intrinsic value of the preferred shares will be determined by an independent valuation, to be completed within 90 days after the distribution. KHD and Mass Financial will continue to assist in the development of both companies and provide services to each other. Certain financial services assets of KHD, which include a passive royalty from an iron ore mine and some banking assets, will not be part of the distribution. Mass Financial will manage certain assets for KHD. The distribution will enable investors to evaluate the financial performance, strategies and other attributes of KHD and Mass Financial in comparison to companies within their respective industries. The distribution will further allow the management of each company to focus their attention and resources on the respective business of each company. In order to be entitled to receive common shares of Mass Financial in the distribution, KHD shareholders must have been a shareholder at the close of business on the record date of January 31, 2006. KHD mailed an information statement regarding Mass Financial to all shareholders of KHD entitled to receive common shares of Mass Financial in the distribution on or about January 25, 2006. The information statement describes the restructuring of KHD and, the procedures by which the distribution was completed. Those who wish to obtain a copy of the information statement may do so by accessing the Securities and Exchange Commission's website located at http://www.sec.gov/. Contact Information: Allen & Caron Inc Joseph Allen (investors) (212) 691-8087 or Len Hall (media) (949) 474-4300 Rene Randall KHD Humboldt Wedag International Ltd +1-604-683-8286 About KHD Humboldt Wedag International Ltd KHD Humboldt Wedag International Ltd owns companies that operate internationally in the engineering services industry, and specializes in the cement, coal and mineral engineering services industries. To obtain further information on the company, please visit our website at http://www.khdhumboldt.com/. Certain statements included herein are "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Factors that could cause actual results to differ materially from anticipated results in connection with management's belief that KHD Humboldt Wedag International Ltd's expansion will continue to see increasing opportunities for the company include risks and uncertainties such as: the inability of the company to obtain regulatory approval to carry out the distribution of the common shares of Mass Financial; general market conditions that may adversely impact revenue generated by the KHD Humboldt Wedag International Ltd business; the demand for products and services; the number of competitors with competitively priced products and services; the uncertainty of government regulation and politics in the countries where we do business; product development or other initiatives of KHD Humboldt Wedag International Ltd's competitors; and other risks and uncertainties detailed in KHD Humboldt Wedag International Ltd's Form 20F, 6-K's and other reports filed with the Securities and Exchange Commission from time to time. DATASOURCE: KHD Humboldt Wedag International Ltd CONTACT: Investors, Joseph Allen, +1-212-691-8087, , or Media, Len Hall, +1-949-474-4300, , both of Allen & Caron Inc, for KHD Humboldt Wedag International Ltd; or Rene Randall of KHD Humboldt Wedag International Ltd, +1-604-683-8286, Web site: http://www.khdhumboldt.com/

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