WALL TOWNSHIP, N.J., April 1, 2011 /PRNewswire/ -- Coates International, Ltd. (OTCBB: COTE) – Coates International Ltd. (the "Company") has signed a letter of intent to merge with an industrial engine and generator manufacturing company in China.

Management believes that if our company is to get into mass production soon, it must act now. The Chinese manufacturer currently employs more than 2,000 skilled plant workers and produces over 80,000 industrial electric power generator sets per year.

Since negotiations commenced eight months ago, the Chinese company has built a new one million square ft. manufacturing plant where the Coates CSRV natural gas electric power generators are planned to be manufactured.

Consummation of this merger would benefit both companies in a number of ways, including:

• Mass production of the Coates CSRV natural gas industrial electric power engine generators will be assured.
• Lower manufacturing costs are anticipated.
• The Chinese company could possibly double its product output.
• The Chinese company would acquire the right to the patented CSRV technology for its existing products.
• "The Company" would begin generating revenues and cash flows from sales and license fees.
• Working capital would be generated to enable large scale expansion of CSRV products manufactured in the USA.
• The merger is expected to establish a significant global footprint in the market place.
• Access to working capital may become more readily accessible internationally.
• "The Company" will manufacture other CSRV products as demand increases.
• It is anticipated that this plan should enhance shareholder value of both merging companies.

The merger is subject to certain conditions and governmental approvals including raising capital internationally.

About Coates International, Ltd.: Coates has been developing over a period of more than 15 years a patented spherical rotary valve CSRV Internal Combustion Engine invented by George J. Coates and his son Gregory. Our public filings with the SEC may be viewed and printed on the website maintained by the SEC at http://www.sec.gov

www.coatesengine.com

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SOURCE Coates International, Ltd.

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