Update on Dividing KHD Into Two Entities

NEW YORK, March 4 /PRNewswire-FirstCall/ -- KHD Humboldt Wedag International Ltd. ("KHD") (NYSE: KHD) announced on January 6, 2010 that it intended to restructure KHD into two distinct legal entities through the distribution to KHD's shareholders, on a pro rata basis, of all the common shares of its subsidiary, KHD Humboldt Wedag (Deutschland) AG ("KID") (the "Arrangement"). After the Arrangement, it was expected that KHD would be divided into a mineral royalty company and an industrial plant technology, equipment and service company.

KHD has now determined that the most fiscally responsible way for KHD and its shareholders to effect the distribution of the KID shares is in several tranches.  This structure will minimize the tax impact to KHD and its shareholders.

First Tranche Summary and Time Line

To obtain greater liquidity and shareholder awareness for the KID shares, KID will offer a placement of 10% of its shares in Europe.  To assist US citizens to trade the KID shares, KHD is planning on establishing a level 1 American Deposit Receipts (ADR) program in the United States.

Under the current structure, the mineral royalty company would change its name from KHD to Terra Nova Royalty Corporation ("Terra Nova") and will focus on:

• the acquisition of existing mineral royalties;
• providing capital for the exploration, development and construction of iron ore and other metals mines in exchange for royalties;
• monetizing metal by-product streams from either operating mines or projects under development; and
• providing acquisition financing to established operating companies in return for a royalty on acquired properties.

Terra Nova intends to maintain its listing on the New York Stock Exchange (the "NYSE") and will continue to trade the "regular way."  If all necessary conditions are satisfied, Terra Nova expects that, in the future, it will no longer have to consolidate KID in its financial results.

Concurrently KID, which will hold all of KHD's industrial plant technology, equipment and service operations, will be listed on the regulated market of the Frankfurt Stock Exchange (the "FSE"). Management will focus on enhancing the traditional cement business through an expansion of current activities in the rapidly growing Indian market. This company will further strengthen its operational and management base in New Delhi, India, as well as add additional resources in other fast-growing emerging markets such as Russia. The company's main engineering centre of excellence in Cologne, Germany will have a primary focus on further developing the company's leading process know-how and product engineering capabilities.

The Company commented, "We have studied various ways to increase value for KHD's shareholders and we believe that through this transaction, the sum of the parts has greater value than the whole."

On March 1, 2010, KHD entered into an Arrangement Agreement with KID, effective as of February 26, 2010, which sets out the terms under which KHD and KID will effect the Arrangement.  As previously announced, the proposed Arrangement requires court approval under the provisions of the British Columbia Business Corporations Act, as well as approval by the shareholders of KHD and the satisfaction of other statutory requirements customary for transactions of this type. On March 1, 2010, KHD obtained an interim order from the Supreme Court of British Columbia providing, amongst other things, for the calling and holding of a special meeting (the "Meeting") of shareholders of KHD to seek approval for the Arrangement.

KHD previously announced that it expected to hold the Meeting on March 22, 2010, however the Meeting will now be held on Monday, March 29, 2010 at 9:00 a.m. (Pacific time).  Materials pertaining to the Meeting, including a management information circular (the "Information Circular"), will be mailed to the shareholders of KHD on or about March 3, 2010.  The Information Circular will be filed with the Securities and Exchange Commission at www.sec.gov and with Canadian securities regulators on SEDAR at www.sedar.com on March 3, 2010.

About KHD Humboldt Wedag International Ltd.

KHD Humboldt Wedag International Ltd. owns companies that operate internationally in the industrial plant technology, equipment and service industry, and specializes in the cement industry. To obtain further information about KHD, please visit our website at http://www.khdhumboldt.com

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding KHD's planned restructuring.  Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future.  No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain assumptions. These assumptions, which include management's current expectations, estimates and assumptions about the potential benefits of the Arrangement, the areas that the resulting legal entities will focus on, the common shares of KID to be distributed to the shareholders of KHD, and that the restructuring will increase value for KHD shareholders, may prove to be incorrect.  A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) the failure to obtain any necessary approvals for the restructuring, (2) the timing and extent of the restructuring, (3) potential negative financial impact from regulatory investigations, claims, lawsuits and other legal proceedings and challenges related to the restructuring, (4) a decrease in Wabush's estimated reserves or mine life or in the Wabush royalty, (5) the uncertainty of government regulation and politics in India and other markets, (6) the inability to successfully expand in the Indian market, (7) continuing decreased demand for our products, including the renegotiation, delay and/or cancellation of projects by our customers and the reduction in the number of project opportunities, (8) a decrease in the demand for cement, minerals and related products, (9) the number of competitors with competitively priced products and services, (10) product development or other initiatives by our competitors, (11) shifts in industry capacity, (12) fluctuations in foreign exchange and interest rates, (13) fluctuations in availability and cost of raw materials or energy, (14) delays in the start of projects, (15) delays in the implementation of projects and disputes regarding the performance of our services, and (16) other factors beyond our control. Additional information about these and other assumptions, risks and uncertainties are set out in the "Risk Factors" section in our Form 6-K filed with the Securities and Exchange Commission and the "Risks and Uncertainties" section in our MD&A filed with Canadian securities regulators.

SOURCE KHD Humboldt Wedag