WEB NEWS Acquisition Activity
SHANGHAI , August 19, 2011 /PRNewswire-Asia-FirstCall / -- Chemspec International Limited (NYSE: CPC; "Chemspec" or the "Company", incorporated in the Cayman Islands ), a leading China -based contract manufacturer of highly-engineered specialty chemicals, announced today the completion of its acquisition by Halogen Limited, a Cayman Islands company beneficially owned by Dr. Jianhua Yang , chairman of the board of directors and chief executive officer of the Company, Mr. Weinian Qi , a management member of the Company, Mr. Yunlong Yuan , a management member of the Company, and Primavera Capital (Cayman) Fund I L.P. ("Halogen"). As a result of the acquisition, the Company became a wholly owned subsidiary of Halogen.
Under the terms of the agreement and plan of merger, which was adopted by the Company's shareholders at an extraordinary general meeting held on August 15, 2011 , each outstanding ordinary share of the Company (other than shares held by Dr. Jianhua Yang , Mr. Yunlong Yuan or Mr. Weinian Qi or any person controlled by the foregoing, or shares as to which shareholders have validly exercised and have not effectively withdrawn or lost their appraisal rights under Section 238 of the Cayman Companies Law) has been cancelled in exchange for the right to receive US$0.1350 in cash without interest and each American Depositary Share, or ADS (each of which represents sixty ordinary shares) (other than ADSs held by Dr. Jianhua Yang , Mr. Yunlong Yuan or Mr. Weinian Qi or any person controlled by the foregoing), represents the right to receive US$8.10 in cash per ADS without interest (less 5 cents per ADS cancellation fees payable by holders of ADSs).
Shareholders of record will receive a letter of transmittal and instructions on how to surrender their share certificates in exchange for the merger consideration. Shareholders should wait to receive the letter of transmittal before surrendering their share certificates. As soon as practicable after the merger is completed, the ADS depositary will call for the surrender of all ADSs for delivery of the merger consideration. Upon the surrender of ADSs, the ADS depositary will pay to the surrendering person $8.10 per ADS in cash without interest (less 5 cents per ADS cancellation fees payable by holders of ADSs).
The Company also announced today that it requested that trading of its ADSs on the NYSE be suspended. The Company requested the NYSE to file Form 25 with the SEC notifying the SEC of the delisting of the ADSs on the NYSE and the deregistration of the Company's registered securities. The Company intends to terminate its reporting obligations under the Securities Exchange Act of 1934, as amended, by promptly filing Form 15 with the SEC. The Company's obligations to file with the SEC certain reports and forms, including Form 20-F and Form 6-K, will be suspended immediately as of the filing date of the Form 15 and will cease once the deregistration becomes effective.
Comments & Business Outlook
First Quarter Results :
Total sales reached RMB209.0 million (US$31.9 million), representing a decrease of 5.1% from the first quarter of 2010 and a decrease of 22.7% from the fourth quarter of 2010.
Gross profit totaled RMB76.8 million (US$11.7 million), representing a decrease of 20.3% and 22.2% from the first quarter of 2010 and the fourth quarter of 2010, respectively.
Income from operations was RMB28.4 million (US$4.3 million), representing a decrease of 52.4% and 44.9% from the first quarter of 2010 and the fourth quarter of 2010, respectively.
Net income attributable to the Company's shareholders was RMB22.6 million (US$3.5 million), representing a decrease of 56.8% and 50.1% from the first quarter of 2010 and the fourth quarter of 2010, respectively.
Basic and diluted earnings per ADS(2) were both RMB0.63 (US$0.10). Basic and diluted earnings per ADS were both RMB1.44 (US$0.21 ) in the first quarter of 2010. Basic and diluted earnings per ADS in the fourth quarter of 2010 were both RMB1.26 (US$0.19 ).
Dr. Jianhua Yang, Chairman and Chief Executive Officer of Chemspec, commented, "The total sales of the first quarter of 2011 was in line with the guidance we provided in April. Although the past quarter was not outstanding, especially compared with our relatively stronger performance in 2010, I want to emphasize two key factors that we value in our business. First, we have strong chemical process and development capabilities and are highly competitive compared to our global peers. Secondly, we have maintained a strong client relationship with our customers. Both factors will greatly help our business when the market demand grows ."
Going Private News
SHANGHAI, May 3, 2011 /PRNewswire-Asia-FirstCall / -- Chemspec International Limited (NYSE: CPC; "Chemspec" or the "Company", incorporated in the Cayman Islands), a leading China-based contract manufacturer of highly-engineered specialty chemicals, today announced that it has filed a going-private transaction statement on Schedule 13E-3 ("Going-Private Statement") with the United States Securities and Exchange Commission ("SEC"). Attached as an exhibit to the Going-Private Statement is a preliminary proxy statement (the "Preliminary Proxy Statement") that, subject to completion, will be used in connection with an extraordinary general meeting of shareholders (the "EGM"), which the Company expects to hold in the third quarter of 2011.
As described more fully in the Going-Private Statement and the Preliminary Proxy Statement, the business to be transacted at the EGM includes shareholder approval of the proposed merger and the agreement and plan of merger, dated as of March 21, 2011, by and among Halogen Limited ("Parent"), a Cayman Islands company beneficially owned by Dr. Jianhua Yang, chairman of the board of directors and chief executive officer of the Company, and Primavera Capital (Cayman) Fund I L.P., Halogen Mergersub Limited, a Cayman Islands company wholly owned by Parent, the Company and Dr. Jianhua Yang (the "Merger Agreement"). The proposed merger and the Merger Agreement are more fully described in the Going-Private Statement and the exhibits attached thereto, including the Preliminary Proxy Statement. In addition, a copy of the Merger Agreement is attached as an exhibit to the Preliminary Proxy Statement. If completed, the proposed merger would result in the Company becoming a privately held company and its ADSs would no longer be listed on the New York Stock Exchange. The Company's board of directors, acting upon the unanimous recommendation of the independent committee formed by the board of directors, approved the Merger Agreement and resolved to recommend that the Company's shareholders vote to adopt the Merger Agreement.
The Going-Private Statement and the Preliminary Proxy Statement, and any amendments thereto, can be obtained from the SEC's website (http://www.sec.gov). In addition, shareholders and ADS holders will receive the definitive proxy statement by mail and requests for additional copies of the definitive proxy statement should be directed to Okapi Partners LLC, the Company's proxy solicitor, toll free at +1 855 208-8903 (or +1 212 297 0720 outside of the United States). INVESTORS AND SHAREHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THESE MATERIALS AND OTHER MATERIALS FILED WITH OR FURNISHED TO THE SEC, AS THEY CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE PROPOSED MERGER AND RELATED MATTERS.
Comments & Business Outlook
Fourth Quarter Highlights :
Total sales reached RMB270.4 million (US$41.0 million ), representing an increase of 52.7% from the fourth quarter of 2009 and a decrease of 16.7% from the third quarter of 2010.
Gross profit totaled RMB98.7 million (US$15.0 million ), an increase of 56.6% from the fourth quarter of 2009 and a decrease of 20.0% from the third quarter of 2010.
Income from operations was RMB51.6 million (US$7.8 million ), an increase of 80.4% from the fourth quarter of 2009 and a decrease of 39.9% from the third quarter of 2010.
Net income attributable to the Company's shareholders was RMB45.3 million (US$6.9 million ), an increase of 30.3% from the fourth quarter of 2009 and a decrease of 35.7% from the third quarter of 2010.
Basic and diluted earnings per ADS(2) were both RMB1.26 (US$0.19 ). Basic and diluted earnings per ADS were both RMB0.96 (US$0.15) in the fourth quarter of 2009. Basic and diluted earnings per ADS in the third quarter of 2010 were RMB1.95 (US$0.29) and RMB1.94 (US$0.29), respectively.
The Company has substantially completed its share repurchase plan announced on September 22, 2010. The total funds used in the share repurchase plan were RMB11.0 million (US$1.6 million ).
Dr. Jianhua Yang, Chairman and Chief Executive Officer of Chemspec, commented, "I am very pleased to announce our fourth quarter and full year financial results. In 2010, we set a new record that our sales passed the one-billion-RMB milestone. This is a testimony of our relentless effort in the year to expand our business development and strengthen the relationship with our customers, especially after the downturn of 2009 . "
Our management estimates that our total sales for the first quarter of 2011 to be between USD 31.35m and USD32.11m.
Comments & Business Outlook
Third quarter of 2010
Revenues, net of value added taxes, for the third quarter of 2010 were $18.4 million , an increase of 42%, or $5.4 million from $13.0 million for the third quarter of 2009.
Gross profit was $12.0 million for the third quarter of 2010, an increase of $3.5 million, or 41%, from $8.5 million for the same period in 2009.
Net income attributable to ordinary shareholders (or "GAAP net income attributable to ordinary shareholders") was $1.7 million , or $0.03 per ADS , for the third quarter of 2010 compared to a GAAP net loss attributable to ordinary shareholders of $7.5 million , for the third quarter of 2009.
Non-GAAP net income was $3.0 million , or $0.06 per ADS , for the third quarter of 2010 compared to $1.5 million , or $0.01 per ordinary share , for the third quarter of 2009. For reconciliation between GAAP and non-GAAP earnings, see the table entitled "GAAP Net Income (loss) to Non-GAAP Net Income Reconciliation."
Business Outlook for Full Year 2010
Although Yunnan and Fujian continued to experience favorable rainfall during the third quarter of 2010, less than favorable rainfall was realized in Zhejiang as a result of fewer than normal impacting typhoons. However, the impact that fourth quarter results will have on the Company's full year results remains uncertain at this time.
In addition to our 493.4 MW capacity as of September 30, 2010 , as of today, we have signed definitive agreements to acquire the first five of seven Taiyu Projects, totaling 55.4 MW , as well as the Dazhaihe project, a 15 MW facility in Yunnan . Consummation of these two acquisitions is expected to be completed in November of 2010. Due to the length of bank financing processes, the remaining 44 MW to complete our overall 607.8 MW post IPO capacity target will likely be delayed until December 2010 or possibly the first quarter of 2011.
Deal Flow
Chemspec International Limited announced that its Board of Directors has
received a proposal letter today from its Chairman and Chief Executive Officer, Mr.
Jianhua Yang ("Mr. Yang"), to acquire all of the outstanding shares of Chemspec not currently owned by Mr. Yang, certain members of the management and their affiliates in a
going private transaction for $8.00 per American Depositary share ("ADS", each ADS representing 60 ordinary shares of the Company) in cash, subject to certain conditions. Mr. Yang and his affiliates currently own approximately 55.5% of Chemspec's ordinary shares. According to the proposal letter, the acquisition is intended to be financed with a combination of debt and equity capital. The proposal letter states that Mr. Yang is in discussions with an investment fund which has expressed interest in providing equity financing, and also that Mr. Yang intends to engage a financial advisor to arrange additional financing for the acquisition. A copy of the text of the proposal letter is set forth below.
