HARBIN, China, Feb. 17, 2017 /PRNewswire/ -- China XD Plastics
Company Limited ("China XD Plastics" or the "Company") (NASDAQ:
CXDC), one of China's specialty
chemical players engaged in the development, manufacture and sale
of modified plastics primarily for automotive applications, today
announced that its Board of Directors (the "Board") has received a
preliminary non-binding proposal letter, dated February 16, 2017, from its Chairman and Chief
Executive Officer, Mr. Jie Han ("Mr.
Han"), XD. Engineering Plastics Company Limited ("XD Engineering"),
a company incorporated in the British
Virgin Islands and wholly owned by Mr. Han, and MSPEA
Modified Plastics Holding Limited, an affiliate of Morgan Stanley
Private Equity Asia III, Inc. (collectively, the "Buyer
Consortium"), to acquire all of the outstanding shares of common
stock of the Company not already beneficially owned by the Buyer
Consortium in a "going-private" transaction (the "Transaction") for
US$5.21 per share of common stock in
cash. This price represents a premium of approximately 28.6% to the
Company's closing price on February 15,
2017, and a premium of approximately 29.3% to the average
closing price during the last 30 trading days. The proposal letter states that the Buyer
Consortium expects that the Board will appoint a special committee
of independent directors to consider the proposal and make a
recommendation to the Board. The proposal letter also states that
the Buyer Consortium will not move forward with the proposed
Transaction unless it is approved by such a special committee, and
the proposed Transaction will be subject to a non-waivable
condition requiring approval by majority shareholder vote of
shareholders other than the Buyer Consortium members. The
Buyer Consortium currently beneficially owns approximately 74% of
the issued and outstanding shares of common stock of the Company on
a fully diluted and as-converted basis.
A copy of the proposal letter is attached as Annex A to this
press release.
The Board has established a special committee (the "Special
Committee") of disinterested directors to consider the
proposal. The Special Committee is
composed of the following independent directors of the Company: Mr.
Lawrence W. Leighton, Mr. Feng
Li, and Mr. Linyuan Zha, with Mr. Leighton serving as
chairperson of the Special Committee. The Special Committee will be
responsible for evaluating, negotiating and recommending to the
Board any proposals involving a strategic transaction by the
Company with one or more third parties. The Special Committee
intends to retain advisors, including an independent financial
advisor, to assist in the evaluation of the proposal and any
additional proposals that may be made by the Buyer Consortium.
The Special Committee cautions the Company's shareholders and
others considering trading in its securities that the Special
Committee has not made any decisions with respect to the Company's
response to the proposal. There can be no assurance that any
definitive offer will be made by the Buyer Consortium or any other
person, that any definitive agreement will be executed relating to
the proposed Transaction, or that this or any other transaction
will be approved or consummated.
About China XD Plastics Company Limited
China XD Plastics Company Limited, through its wholly-owned
subsidiaries, develops, manufactures and sells polymer composites
materials, primarily for automotive applications. The Company's
products are used in the exterior and interior trim and in the
functional components of 28 automobile brands manufactured in
China, including without
limitation, Audi, Mercedes Benz,
BMW, Buick, Chevrolet, VW Passat, Golf and Jetta, Mazda, and
Toyota. The Company's wholly-owned research center is dedicated to
the research and development of polymer composites materials and
benefits from its cooperation with well-known scientists from
prestigious universities in China.
As of September 30, 2016, 390 of the
Company's products have been certified for use by one or more of
the automobile manufacturers in China. For more information, please visit the
Company's English website at http://www.chinaxd.net.
Safe Harbor Statement
This announcement contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements other than statements
of historical fact in this announcement are forward-looking
statements. These forward-looking statements involve known and
unknown risks and uncertainties and are based on current
expectations, assumptions, estimates and projections about the
Company and the industry. The Company undertakes no obligation to
update forward-looking statements to reflect subsequent occurring
events or circumstances, or to changes in its expectations, except
as may be required by law. Although the Company believes that the
expectations expressed in these forward looking statements are
reasonable, it cannot assure you that its expectations will turn
out to be correct, and investors are cautioned that actual results
may differ materially from the anticipated results.
Contacts:
China XD Plastics
Mr. Taylor Zhang, CFO
(New York)
Phone: +1 (212) 747-1118
Email: cxdc@chinaxd.net
Investor Relations: Citigate Dewe Rogerson
Ms. Vivian Chen, Managing
Director
US: +1 (347) 481-3711
Email: Vivian.chen@citigatedr.com
Annex A
Mr. Jie Han
XD. Engineering Plastics Company Limited
MSPEA Modified Plastics Holding Limited
February 16,
2017
The Board of Directors
China XD Plastics Company Limited
No. 9 Dalian North Road, Haping Road Centralized Industrial
Park
Harbin Development Zone
Heilongjiang Province,
P. R. China
Dear Sirs:
Mr. Jie Han ("Mr. Han"), Chief
Executive Officer and Chairman of China XD Plastics Company Limited
(the "Company"), XD. Engineering Plastics Company Limited ("XD
Engineering"), a company incorporated in the British Virgin Islands and wholly owned by Mr.
Han and MSPEA Modified Plastics Holding Limited, an affiliate of
Morgan Stanley Private Equity Asia III, Inc. ("MSPEA", together
with Mr. Han and XD Engineering, the "Buyer Group", "we" or "us"),
are pleased to submit this preliminary non-binding proposal to
acquire all of the outstanding shares of common stock ("Common
Stock") of the Company not already owned by the Buyer Group in a
going-private transaction (the "Acquisition"). The Buyer
Group currently beneficially owns approximately 74% of the issued
and outstanding shares of Common Stock of the Company on a fully
diluted and as-converted basis.
We believe that our proposal of US$5.21 in cash per share of Common Stock will
provide a very attractive opportunity to the Company's
stockholders. This price represents a premium of approximately
28.6% to the Company's closing price on February 15, 2017, and a premium of approximately
29.3% to the average closing price during the last 30 trading
days.
The terms and conditions upon which we are prepared to pursue
the Acquisition are set forth below. We are confident in our
ability to consummate an Acquisition as outlined in this
letter.
1. Buyer. We intend to form an acquisition vehicle
for the purpose of pursuing the Acquisition (the "Acquisition
Vehicle"). The Acquisition will be in the form of a merger of the
Company with the acquisition vehicle. We are interested only in
pursuing this Acquisition and are not interested in selling our
shares of Common Stock or preferred stock of the Company, as the
case may be, in any other transaction involving the Company.
2. Purchase Price. Our proposed consideration
payable for the Company's Common Stock acquired in the Acquisition
will be US$5.21 in cash per
share.
3. Financing. We intend to finance the Acquisition
with a combination of debt and equity capital. Equity
financing is expected to be provided by the Buyer Group in the form
of rollover equity in the Company and cash contributions from third
party sponsors. Debt financing is expected to be provided by
loans from third party financial institutions. We are
confident that we can timely secure adequate financing to
consummate the Acquisition.
4. Due Diligence. Parties providing financing will
require a timely opportunity to conduct customary due diligence on
the Company. We would like to ask the board of directors of
the Company to accommodate such due diligence request and approve
the provision of confidential information relating to the Company
and its business to possible sources of equity and debt financing
subject to confidentiality agreements with customary terms.
5. Definitive Agreements. Mr. Han has engaged
Skadden, Arps, Slate, Meagher & Flom LLP as his U.S. legal
counsel. MSPEA has engaged Paul, Weiss, Rifkind, Wharton
& Garrison LLP as its U.S. legal counsel. We are prepared
to negotiate and finalize definitive agreements (the "Definitive
Agreements") expeditiously. This proposal is subject to
execution of the Definitive Agreements. These documents will
include provisions typical for transactions of this type.
6. Confidentiality. The Buyer Group will, as
required by law, promptly file a Schedule 13D amendment to disclose
this letter. We are sure you will agree with us that it is in
all of our interests to ensure that we proceed our discussions
relating to the Acquisition in a confidential manner, unless
otherwise required by law, until we have executed the Definitive
Agreements or terminated our discussions.
7. Process. We believe that the Acquisition will
provide superior value to the Company's stockholders. We
recognize of course that the Board will evaluate the proposed
Acquisition independently before it can make its determination
whether to endorse it. It is our expectation that the Board
will appoint a special committee of independent directors to
consider our proposal and make a recommendation to the
Board. We will not move forward with the transaction
unless it is approved by such a special committee. In
addition, the transaction will be subject to a non-waivable
condition requiring approval by majority shareholder vote of
shareholders other than the Buyer Group.
8. No Binding Commitment. This letter constitutes
only a preliminary indication of our interest, and does not
constitute any binding commitment with respect to an
Acquisition. Such a commitment will result only from the
execution of Definitive Agreements, and then will be on the terms
provided in such documentation.
In closing, we would like to express our commitment to working
together with you to bring this Acquisition to a successful and
timely conclusion. Should you have any questions regarding
this proposal, please do not hesitate to contact us. We look
forward to speaking with you.
* * * * *
[Signature Page to Follow]
Sincerely,
Jie Han
_/s/ Jie
Han________________________
XD. Engineering Plastics Company Limited
By:_ _/s/ Jie Han
_____________________
Name: Jie HAN
Title: Authorized Signatory
MSPEA Modified Plastics Holding Limited
By:_ _/s/ Ivan John
Sutlic_____________________
Name: Ivan John Sutlic
Title: Authorized Signatory
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SOURCE China XD Plastics Company Limited