Acquisition would increase aggregate production capacity by over 23%

BEIJING, Nov. 17 /PRNewswire-Asia-FirstCall/ -- General Steel Holdings, Inc. ("General Steel" or "the Company") (NYSE: GSI), one of China's leading non-state-owned producers of steel products and aggregators of domestic steel companies, today announced that it has signed a non-binding Letter of Intent ("LOI") to acquire a 60% controlling interest in Tangshan Baotai Iron and Steel Group Co., Ltd. ("Baotai"), a non-state-owned producer of steel billet and strip steel in Tangshan, Hebei province, China.

Upon closing, General Steel expects to benefit from Baotai's established market position producing and selling steel billet and strip steel in Hebei province as well as its geographical location approximately 100 kilometers from the Tangshan port, which gives Baotai access to high-quality imported iron ore at minimal transportation costs. In addition, Baotai has annualized capacity of 1.5 million metric tons, which will increase General Steel's aggregate capacity by over 23% to 7.8 million metric tons and further its goal of becoming one of China's largest and most profitable steel companies.

"We have a unique value proposition that makes us well-suited to lead in China's steel industry consolidation effort," said Mr. Henry Yu, General Steel's chairman and chief executive officer. "Our competitive advantage is our established track record of both acquiring private companies with outstanding potential as well as buying the prime assets of state-owned enterprises through joint-ventures. With access to the western capital markets, we are able to inject currency to improve the profitability of acquired assets while simultaneously stimulating economic development. In order to meet our partnership requirements, the management teams of the companies we acquire must have established track records, a deep understanding of their local market and be willing to stay on board with a long-term vested interest in the venture's performance. After extensive dialogue, it is clear that Baotai's interests and vision are aligned with ours and we are excited to take the next steps in forming our mutually beneficial partnership."

Mr. Baocai Wang, Baotai's chairman, commented, "This agreement lays the foundation for an exciting future as a member of the larger General Steel group. As the catalysts for consolidation continue to strengthen in China, this partnership will provide us with a strategic opportunity to continue growing while maintaining our operational team. We are eager to capitalize on the benefits and synergies that come with being part of General Steel's larger-scale, forward-thinking and uniquely positioned steel group in China."

The completion of this acquisition is subject to certain conditions, including satisfactory completion of appraisals, audit and customary due diligence as well as the execution of a definitive agreement. If a definitive agreement is reached, General Steel anticipates providing further details including specific financial terms on this proposed transaction upon execution thereof.

If this transaction is consummated, General Steel is expected to have approximately 10,000 employees and operate five subsidiaries based in China producing a variety of steel products including rebar, steel billet and strip steel, hot-rolled carbon and silicon sheet, high-speed wire and spiral-weld pipe.

About Tangshan Baotai Iron and Steel Group Co., Ltd.

An integrated steel producer founded in 2002, Tangshan Baotai Iron and Steel Group Co., Ltd. is located in Tangshan city, Hebei province in northeastern China, 100 kilometers from the Tangshan port. It has an aggregate production capacity of 1.5 million metric tons and focuses sales within the domestic market.

About General Steel Holdings, Inc.

General Steel Holdings, Inc., (NYSE: GSI), headquartered in Beijing, China, operates a diverse portfolio of Chinese steel companies. With 6.3 million metric tons of aggregate production capacity, its companies serve various industries and produce a variety of steel products including rebar, hot-rolled carbon and silicon sheet, high-speed wire and spiral-weld pipe. General Steel Holdings, Inc. has steel operations in Shaanxi and Guangdong provinces, Inner Mongolia Autonomous Region and Tianjin municipality. For more information, please visit http://www.gshi-steel.com .

Information Regarding Forward-Looking Statements

This press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs about future events and financial, political and social trends and assumptions it has made based on information currently available to it. The Company cannot assure that any expectations, forecasts or assumptions made by management in preparing these forward-looking statements will prove accurate, or that any projections will be realized. Actual results could differ materially from those projected in the forward-looking statements as a result of inaccurate assumptions or a number of risks and uncertainties. These risks and uncertainties are set forth in the Company's filings under the Securities Act of 1933 and the Securities Exchange Act of 1934 under "Risk Factors" and elsewhere, and include: (a) those risks and uncertainties related to general economic conditions in China, including regulatory factors that may affect such economic conditions; (b) whether the Company is able to manage its planned growth efficiently and operate profitable operations, including whether its management will be able to identify, hire, train, retain, motivate and manage required personnel or that management will be able to successfully manage and exploit existing and potential market opportunities; (c) whether the Company is able to generate sufficient revenues or obtain financing to sustain and grow its operations; (d) whether the Company is able to successfully fulfill our primary requirements for cash and (e) other risks, including those disclosed in the Company's Form 10-K, filed with the SEC. Forward-looking statements contained herein speak only as of the date of this release. The Company does not undertake any obligation to update or revise publicly any forward-looking statements, whether to reflect new information, future events or otherwise.

    For investor and media inquiries, please contact:

    In China:
     Jing Ou-Yang
     General Steel Holdings, Inc.
     Tel:   +86-10-5879-7346
     Email: jing.ouyang@gshi-steel.com

     Justin Knapp
     Ogilvy Financial, Beijing
     Tel:   +86-10-8520-6556
     Email: gsi@ogilvy.com

    In the United States:
     Jessica Barist Cohen
     Ogilvy Financial, New York
     Tel:   +1-646-460-9989
     Email: gsi@ogilvy.com

SOURCE General Steel Holdings, Inc.

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