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MTC ANNOUNCES FORMATION OF HUBEI CELLULAR JOINT VENTURE COMPANY

 RICHMOND, B.C., March 15 /PRNewswire/ -- MTC Electronics Technologies Co. Ltd (NASDAQ: MTCEF) announced today that on Feb. 18 it signed a joint venture contract with Hubei San Gao Telecommunication Technology Development Corporation (Hubei San Gao) to form an equity joint venture company (Hubei PT MTC Communication Development Corporation Ltd.) that will build, own, and operate cellular telephone systems in Hubei Province of the People's Republic of China. The joint venture contract has been approved by all levels of government including the Hubei Province Ministry of Foreign Economic Relations and Trade, and the joint venture company has been registered with, and issued a business license by, the State Administration for Industry and Commerce of the People's Republic of China. The joint venture company expects to commence operations this year. Hubei San Gao is wholly owned by the Hubei Posts and Telecommunications Administration (PTA).
 The province of Hubei is located in South East China and has a population of approximately 55 million. The Chinese government is currently constructing one of the largest dams in the world in Hubei Province, 125 miles west of the City of Wuhan, which is the area targeted by the company for the initial phase of the Hubei cellular telephone system. The City of Wuhan has a population of approximately 6 million.
 Highlights of the joint venture contract are:
 -- The joint venture company will install, own and operate cellular systems in Hubei Province. The joint venture partners will share in the profits and risks of the joint venture company in direct proportion to their investment in the joint venture company;
 -- The joint venture company will have investment capital of $30 million and registered capital of $12 million and expects to commence operations this year;
 -- MTC's interest in the joint venture company is 51 percent, while Hubei San Gao's interest is 49 percent;
 -- MTC will make its contribution to the joint venture's investment capital in hard currency (U.S. dollars) and equipment (which will be independently appraised), while Hubei San Gao will make its contribution in hard currency, Renminbi (local currency), and equipment;
 -- The joint venture contract will last 11 years. Six months before the joint venture contract is to expire the contract may be renewed by unanimous approval of the board of directors after receiving government approval;
 -- The joint venture company will be overseen by a seven-member board of directors. MTC will select three of the directors, Hubei San Gao will choose three directors, and the seventh director will be selected by mutual consent;
 -- MTC will be responsible for purchasing equipment and goods from foreign suppliers, installation and testing of the equipment, and training joint venture company staff;
 -- For foreign exchange purposes, the Renminbi to U.S. dollar exchange rate will be the rate of exchange set in the government foreign exchange swap centers; and
 -- MTC will be given a preference in providing advanced technology equipment to the joint venture, provided that MTC meets the terms offered by other suppliers.
 To facilitate the operations of the joint venture and to comply with Chinese policy, the joint venture company will enter into a management agreement with the Hubei Mobile Telecommunications Bureau, a company that is wholly owned by the Hubei PTA. Under the terms of this management agreement, Hubei Mobile Telecommunications Bureau will operate the cellular system under the direction of the joint venture. MTC and Hubei San Gao plan to install the first phase of their cellular project in Hubei Province this year.
 In other developments, MTC announced that it has retained the law firm of
Gibson, Dunn & Crutcher as its U.S. legal counsel. Gibson,


Dunn & Crutcher will assume general responsibility for U.S. legal matters affecting the company.
 MTC Electronic Technologies Co. Ltd. is a Canadian company which manufactures and sells consumer electronics and has or is negotiating for interests in joint venture companies to manufacture telecommunications products and to provide telecommunications services in the People's Republic of China.
 -0- 3/15/93
 /CONTACT: Goodwin Wang of MTC, 604-278-8788; or Peter Jensen of Devlin Jensen Barrister & Solicitors, 604-684-2550, for MTC/
 (MTCEF)


CO: MTC Electronics Technologies Co. Ltd.;
 Hubei San Gao Telecommunication Technology Development Corporation ST: British Columbia IN: TLS SU: JVN


GK-LR -- NY045 -- 6067 03/15/93 13:31 EST
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Date:Mar 15, 1993
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