TORONTO, ONTARIO -- (Marketwired) -- 07/04/13 -- Hanfeng Evergreen Inc. (TSX: HF) ("Hanfeng" or the "Corporation") today provided an update regarding the current status of the pending privatization of the Corporation by Xinduo Yu, the Chief Executive Officer of the Corporation, and 8310831 Canada Inc., a corporation wholly-owned by Xinduo Yu (collectively, the "Purchaser"), which was previously approved by the Corporation's shareholders at an annual and special meeting of the Corporation's shareholders held on March 15, 2013.
Since the board of directors of the Corporation unanimously approved the proposed privatization (without the participation of Mr. Yu), and which approval followed the unanimous recommendation of a special committee of independent directors (the "Special Committee"), the Corporation has agreed to two extensions on March 14, 2013 and May 3, 2013, respectively, for the purpose of providing the Purchaser with further time to arrange the required financing to complete the proposed privatization. As previously disclosed, the arrangement agreement entered into by the Corporation and the Purchaser on February 11, 2013 in furtherance of the proposed privatization has been amended to enable these extensions to occur without in any way compromising or affecting the rights of the Corporation and the obligations of the Purchaser. In this regard, the basic terms of the arrangement, under which the Purchaser has agreed to acquire all of the outstanding common shares of the Corporation not already owned by the Purchaser for cash consideration of CDN$2.25 per share, otherwise remain unchanged. The current terms of the arrangement agreement, as amended, contemplate an outside closing date of July 3, 2013. Notwithstanding the terms of the arrangement agreement, the transaction cannot be consummated at this time.
The Corporation has now been advised by the Purchaser that the requisite funding arrangements (comprising CDN$85 million of debt financing committed by Nongken Longgang Agriculture Investment Co., Limited and the balance of the requisite funding, comprising approximately CDN$25 million, directly from Xinduo Yu) have been put in place to consummate the proposed privatization transaction. However, those arrangements would require certain amendments to be made to the plan of arrangement, which contemplate the direct payment by the Purchaser of the Chinese currency equivalent of CDN$2.25 in cash per share payable under the arrangement to all registered shareholders of the Corporation resident in China. In all other respects, the basic terms of the arrangement would remain unchanged.
The Special Committee is in the ongoing process of reviewing and considering the new funding proposal presented to it by the Purchaser as well as the proposed amendments to the plan of arrangement required to give effect to this funding proposal, and is in discussions with the Purchaser and its advisors regarding the certainty of the commitments for this funding proposal and the steps required to implement the proposed amendments to the plan of arrangement.
Hanfeng does not intend to make any further comment unless or until there is material information to announce.
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