WEB NEWS Going Private News
SHENZHEN, China , April 18, 2012 /PRNewswire-Asia / -- China GrenTech Corporation Limited (NASDAQ: GRRF, "GrenTech," or the "Company"), a leading China -based provider of radio frequency and wireless coverage products and services, announced today the completion of the merger contemplated by the previously announced amended and restated agreement and plan of merger dated January 20, 2012 , among Talenthome Management Limited ("Parent"), a British Virgin Islands exempted company, Xing Sheng Corporation Limited ("Merger Sub"), a Cayman Islands exempted company wholly-owned by Parent, and the Company (the "Merger Agreement"). Parent is jointly and indirectly owned by Mr. Yingjie Gao, the Company's Chairman and Chief Executive Officer, Ms. Rong Yu, the Company's Director and Chief Financial Officer, and Ms. Yin Huang, a founder of the Company. The merger is a going private transaction with Mr. Yingjie Gao , Ms. Rong Yu and Ms. Yin Huang . As a result of the merger, the Company became a wholly owned subsidiary of Parent.
Under the terms of the Merger Agreement, which was approved by the Company's shareholders at an extraordinary general meeting of shareholders held on April 16, 2012 , each ordinary share of the Company ("Share") issued and outstanding immediately prior to the effective time of the merger, other than (i) the Shares and American depositary shares ("ADSs") beneficially owned by the Buyer Group (as defined in the Company's proxy statement dated March 15, 2012 ), (ii) the Shares held by the ADS depositary which are not represented by ADSs and (iii) the Shares beneficially owned by shareholders who have validly exercised and have not effectively withdrawn or lost their appraisal rights pursuant to Section 238 of the Cayman Islands Companies Law Cap.22 (Law 3 of 1961, as consolidated and revised) (the "Dissenting Shares"), has been cancelled in exchange for the right to receive US$0.126 per Share and each ADS, each representing 25 Shares, represents the right to receive US$3.15 per ADS (less US$0.05 per ADS cancellation fees), in each case, in cash without interest and net of any applicable withholding taxes.
Registered holders of Shares and ADSs represented by share or ADS certificates, other than the Dissenting Shares, will receive a letter of transmittal and instructions on how to surrender their certificates in exchange for the merger consideration and should wait to receive the letter of transmittal before surrendering their certificates. Payment will be made to surrendering registered ADS holders and holders of ADSs in un-certificated form as soon as practicable after Citibank, N.A., the Company's depositary, receives the merger consideration. For any questions relating to the surrender and payment procedures, holders of Shares may contact the Company at +86 755 2650 3007 and holders of ADSs may contact Citibank, N.A. toll free at +1 877 248 4237.
The Company also announced today that it requested that trading of its ADSs on the NASDAQ Global Select Market ("NASDAQ") be suspended. The Company requested NASDAQ to file a Form 25 with the Securities and Exchange Commission (the "SEC") notifying the SEC of the delisting of the ADSs on NASDAQ 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 a Form 15 with the SEC. The Company's obligations to file or furnish 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.
Going Private News
SHENZHEN, China , April 16, 2012 /PRNewswire-Asia / -- China GrenTech Corporation Limited (NASDAQ: GRRF, "GrenTech," or the "Company"), a leading China -based provider of radio frequency and wireless coverage products and services, announced today that, at an extraordinary general meeting of shareholders held today (the "EGM"), the Company's shareholders voted in favor of the proposal to approve the previously announced amended and restated agreement and plan of merger dated January 20, 2012 , among Talenthome Management Limited ("Parent"), a British Virgin Islands exempted company, Xing Sheng Corporation Limited ("Merger Sub"), a Cayman Islands exempted company wholly-owned by Parent, and the Company (the "Merger Agreement"), pursuant to which Merger Sub will merge with and into the Company, with the Company continuing as the surviving company and wholly-owned by Parent. Approximately 81.6% of the Company's total outstanding ordinary shares voted in person or by proxy at the EGM. Of the ordinary shares voted in person or by proxy at the EGM, approximately 95.1% were voted in favor of the proposal to approve the Merger Agreement and the transactions contemplated by the Merger Agreement, including the merger, and approximately 95.1% were voted in favor of the proposal to authorize the directors of the Company to do all things necessary to give effect to the Merger Agreement.
The parties expect to complete the merger as soon as practicable, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement. If completed, the merger would result in the Company becoming a privately held company wholly-owned by Parent and the Company's American depositary shares would no longer be listed on the NASDAQ Global Select Market
Going Private News
SHENZHEN, China , January 20, 2012 /PRNewswire-Asia-FirstCall / -- China GrenTech Corporation Limited (NASDAQ: GRRF, "GrenTech," or the "Company"), a leading China -based provider of radio frequency and wireless coverage products and services, today announced that it has entered into an amended and restated agreement and plan of merger with Talenthome Management Limited ("Parent") and Xing Sheng Corporation Limited ("Merger Sub") in order to amend certain provisions of the agreement and plan of merger among the parties entered into on January 12, 2012 (the "Original Merger Agreement," and as amended and restated, the "Merger Agreement"). Merger Sub is a wholly-owned subsidiary of Parent which is jointly owned indirectly by Mr. Yingjie Gao , the Company's Chairman and Chief Executive Officer ("Mr. Gao"), Ms. Rong Yu, the Company's Director and Chief Financial Officer, and Ms. Yin Huang (together, the "Buyer Group").
The amendments are being made to correct the inadvertent omission by the Company of 28,000,000 outstanding ordinary shares of the Company (the "Additional Shares") from the total number of issued and outstanding shares initially stated in the Original Merger Agreement. The amended number of total issued and outstanding shares stated in the Merger Agreement is 587,397,825 ordinary shares. In addition to the expected proceeds from the previously announced loan commitment in the amount of HK$320,000,000 from Guotai Junan Finance (Hong Kong ) Limited which the Buyer Group intends to use to finance the merger and other transactions contemplated by the Merger Agreement, Mr. Gao has committed to unconditionally disburse US$3.45 million to Parent by way of a shareholder loan at the effective time of the merger pursuant to a promissory note executed and delivered on January 20, 2012 in favor of Parent to provide funds for the acquisition of the Additional Shares in the event the merger is approved by the Company's shareholders and the other closing conditions are satisfied. Mr. Gao's disbursement obligation under the promissory note is guaranteed by Guoren Industrial Developments Limited, a shareholder of the Company which is wholly owned by Mr. Gao. Except as provided above, the material terms and conditions of the Original Merger Agreement, including the merger consideration of US$0.126 per ordinary share and US$3.15 per American depositary shares , remain unchanged. The Company's Board of Directors, acting upon the unanimous recommendation of the Independent Committee formed by the Board of Directors, has approved the foregoing amendment and restatement of the Original Merger Agreement. Taking into account the Additional Shares, the Buyer Group collectively beneficially owns approximately 40.1% of the Company's issued and outstanding ordinary shares.
Going Private News
SHENZHEN, China , January 12, 2012 /PRNewswire-Asia-FirstCall / -- China GrenTech Corporation Limited (NASDAQ: GRRF, "GrenTech," or the "Company"), a leading China -based provider of radio frequency and wireless coverage products and services, today announced that it has entered into an agreement and plan of merger (the "Merger Agreement") with Talenthome Management Limited ("Parent"), a British Virgin Islands exempted company, and Xing Sheng Corporation Limited ("Merger Sub"), a Cayman Islands exempted company wholly-owned by Parent. Parent is jointly owned indirectly by Mr. Yingjie Gao , the Company's Chairman and Chief Executive Officer, Ms. Rong Yu, the Company's Director and Chief Financial Officer, and Ms. Yin Huang (together, the "Buyer Group"). The Buyer Group collectively beneficially owns approximately 41.9% of the Company's issued and outstanding ordinary shares and intends to finance the merger and the other transactions contemplated by the Merger Agreement through proceeds from a loan facility in the amount of HK$320,000,000 from Guotai Junan Finance (Hong Kong ) Limited.
Pursuant to the Merger Agreement, (i) upon the terms and subject to the conditions set forth therein, at the effective time of the merger, Merger Sub will be merged with and into the Company and the Company will become a wholly-owned subsidiary of Parent, and (ii) each ordinary share of the Company (including ordinary shares represented by American Depositary Shares ("ADSs"), each of which represents 25 ordinary shares) issued and outstanding immediately prior to the effective time of the merger will be cancelled in exchange for the right to receive US$0.126 (or US$3.15 per ADS) in cash without interest, except for the ordinary shares (including ordinary shares represented by ADSs) (x) beneficially owned by the Buyer Group, which will be cancelled without receiving any consideration, and (y) owned by holders of such ordinary shares who have validly exercised and not effectively withdrawn or lost their appraisal rights pursuant to Section 238 of the Cayman Islands Companies Law, as amended. This represents a 23.0% premium over the closing price as quoted by Bloomberg L.P. on November 11, 2011 and a 40.6% over the 60-trading day volume weighted average price as quoted by Bloomberg L.P. on November 11, 2011, the last trading day prior to the Company's announcement on November 14, 2011 that it had received a "going private" proposal.
Going Private News
SHENZHEN, China , November 14, 2011 /PRNewswire-Asia-FirstCall / -- China GrenTech Corporation Limited (NASDAQ: GRRF, "GrenTech", or the "Company"), a leading China -based provider of radio frequency and wireless coverage products and services, today announced that its Board of Directors has received a proposal letter dated November 12, 2011 from its Chairman and Chief Executive Officer, Mr. Yingjie Gao ("Mr. Gao"), to acquire all of the outstanding shares of GrenTech not currently owned by Mr. Gao, certain members of the management and their affiliates in a going private transaction for $3.10 per American Depositary share ("ADS", each ADS representing 25 ordinary shares of the Company) in cash, subject to certain conditions.
Mr. Gao and his affiliates currently own approximately 32.39% of GrenTech's ordinary shares. According to the proposal letter, the acquisition is intended to be financed primarily through debt financing. The proposal letter states that Mr. Gao is in discussions with Guotai Junan Finance (Hong Kong ) Limited ("Guotai Junan") about financing the proposed transaction and has received a "highly confident" letter from Guotai Junan. A copy of the text of the proposal letter is set forth below as Exhibit A.
GrenTech's Board of Directors has formed a special committee of independent directors (the "Independent Committee") consisting of three independent directors, Mr. Cuiming Shi, Mr. Gordon Tsang Hing Lun and Mr. Xiaohu You , to consider this proposal. The Independent Committee will retain a financial advisor and legal counsel to assist it in its work. The Board of Directors cautions the Company's shareholders and others considering trading in its securities that the Board just received the non-binding proposal from Mr. Gao and no decisions have been made by the Independent Committee with respect to GrenTech's response to the proposal. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated.
Comments & Business Outlook
Third Quarter 2011 Results
Total revenue was RMB406.2 million ( US$63.7 million )(1), an increase of 2.4% year-over-year compared to RMB396.9 million during the third quarter of 2010
Gross profit was RMB111.2 million ( US$17.4 million ), an increase of 7.2% year-over-year compared to RMB103.8 million during the third quarter of 2010
Operating income was RMB25.6 million ( US$4.0 million ), an increase of 1.0% year-over-year compared to RMB 25.3 million during the third quarter of 2010
Net income attributable to shareholders was RMB9.1 million ( US$1.4 million ), a decrease of 29.8% year-over-year compared to RMB12.9 million during the third quarter of 2010
Diluted earnings per ADS(2) was RMB0.39 (US$0.06) , compared to RMB0.54 per ADS during the third quarter of 2010
"We are pleased to report solid revenues in the third quarter of RMB406.2 million , or US$63.7 million , an increase of 2.4% over the comparable period in 2010. Gross profit increased by 7.2% year-over-year and gross margin increased to 27.4%. Importantly, in 2011, we are placing a strong emphasis on the promotion of new products and our ability to capitalize upon breakthroughs in new technology so as to develop new products and enter new businesses," said Mr. Yingjie Gao , Chairman and CEO of GrenTech.
"Our WLAN business has experienced healthy growth compared to 2010, but new business areas such as the CMMB project and subway network coverage have been slower than projected at the beginning of the year," Mr. Gao added.
"In the remainder of 2011, we will strive to strategically improve our business operations and focus on mid- and long-term growth. We believe that investment by telecommunication operators in the industry, combined with our new production and technology introductions, will enable GrenTech to continue to grow on a sound and steady basis," Mr. Gao concluded.
Guidance for Fourth Quarter 2011
For the fourth quarter of 2011, GrenTech forecasts its revenue to be in the range of RMB800.0 million to RMB880.0 million .
Notable Share Transactions
SHENZHEN, China , September 19, 2011 /PRNewswire-Asia-FirstCall / -- China GrenTech Corporation Limited (NASDAQ: GRRF, "GrenTech", or "the Company"), a leading China -based provider of radio frequency and wireless coverage products and services, today announced that its Board of Directors has approved a share repurchase program.
Under the terms of this share repurchase program, GrenTech may repurchase up to US$10.0 million worth of its issued and outstanding American Depositary Shares ("ADSs") from time to time in open-market transactions on the NASDAQ Global Select Market. The timing and dollar amount of repurchase transactions is subject to the Board of Director's discretion depending on market conditions and will be subject to Securities and Exchange Commission ("SEC") Rule 10b-18 requirements. GrenTech plans to fund share repurchases made under this program from its available working capital. The share repurchase program does not have an expiration date and may be modified or discontinued at any time by the Company's Board of Directors.
"Given our solid market leadership, strong pipeline of new products, cutting edge technology and the positive outlook for the telecommunication market in China , we believe that our shares are undervalued," said Mr. Yingjie Gao , GrenTech's Chairman and Chief Executive Officer. "Our share repurchase program demonstrates our commitment to enhancing long term shareholder value as well as our confidence in our business model and strategic growth plan."
Comments & Business Outlook
Second Quarter 2011 Financial Highlights
Total revenue was RMB400.0 million ( US$61.9 million )(1), an increase of 8.0% year-over-year compared to RMB370.4 million during the second quarter of 2010
Gross profit was RMB109.9 million ( US$17.0 million ), an increase of 19.1% year-over-year compared to RMB92.3 million during the second quarter of 2010
Operating income was RMB29.0 million ( US$4.5 million ), an increase of 59.2% year-over-year compared to RMB 18.2 million during the second quarter of 2010
Net income attributable to shareholders was RMB12.7 million ( US$2.0 million ), an increase of 142.3% year-over-year compared to RMB5.3 million during the second quarter of 2010
Diluted earnings per ADS(2) was RMB0.56 (US$0.09 ) , compared to RMB0.22 per ADS during the second quarter of 2010
"We are pleased to report robust financial results in the second quarter, with a 59.2% growth in operating income as our new products and services mix enabled strong margin expansion and gains in profitability as compared to the same quarter last year. We also capitalized upon our strategic focus on new technology, new products and new businesses. We believe that we are well positioned given a strategic shift in China 's telecommunication industry to benefit from key business areas such as WLAN, the CMMB project, network coverage for subways, miniaturized base station antennas, and small-scale trials of RF ceramic filters. We are actively transitioning to these high growth areas even as we maintain our market leadership in the traditional wireless coverage products and services and base station RF products," said Mr. Yingjie Gao , Chairman and CEO of GrenTech.
"The major telecommunication operators in China have increased their investment in WLAN, and GrenTech was selected as the provider for ten individual provinces in the recent centralized bidding held by China Unicom for its WLAN equipment needs. Our success in new business areas also includes being selected as the equipment and services provider of nine provinces and cities in the CMMB project and bids won for subway network coverage in seven cities. GrenTech will continue to participate in the individual bidding for these new businesses going forward," Mr. Gao added.
"2011 will be an important year for GrenTech due to telecommunication operators' significant investment in the industry combined with the Company's new production and technology introductions, both of which we expect to enhance our market position and drive continued growth in our businesses ," Mr. Gao concluded.
Guidance for Third Quarter 2011
For the third quarter of 2011, GrenTech forecasts its revenue to be in the range of RMB410.0 million to RMB450.0 million .
Liquidity Requirements
In line with the industry practice, we typically have a long receivable collection cycle. As a result, our cash provided by our sales in any given year may not be sufficient to fully meet our operating cash requirements in that year. We anticipate that our operations may continue to encounter such timing differences in cash flows in the near term. We used and will continue to use available financing means, including bank loans and receivable selling arrangements, to provide sufficient cash inflows to balance such timing differences in our cash flows. We believe that we maintain a good relationship with our major lending banks, and the limits of our bank borrowing facilities have been raised by the lending banks from time to time. We do not expect any difficulty in obtaining bank borrowing facilities to provide cash inflows to balance these timing differences in our cash flows. We also anticipate that near-term working capital and other capital requirements will increase due to our increased sales activities, increased research and development efforts related primarily to 3G and TD-LTE products as well as base station RF products. We anticipate meeting such increase in our near-term working capital and other capital requirements primarily through our internally generated cash and financing means available to us, including short-term bank loans and sales of accounts receivable.
We have procured bank borrowing facilities sufficient for our business operations from various banks, and we may obtain additional bank borrowing facilities. These bank borrowing facilities are generally short-term facilities. We may procure long-term bank borrowing facilities if there are material capital requirements and we anticipate we will have sufficient cash resources to repay the loans. We budget our capital periodically to manage our operational cash flow and meet our bank loan repayments. We believe that our cash flows from operations and current levels of cash, combined with fund available to us through financing, will be sufficient to meet our anticipated cash needs for at least the next 12 months.
Comments & Business Outlook
First Quarter Results :
Total revenue was RMB177.6 million (US$27.1 million)(1), an increase of 11.5% year-over-year
Gross profit was RMB45.2 million (US$6.9 million ), an increase of 16.8% year-over-year
Operating loss was RMB18.6 million (US$2.8 million ), compared to a loss of RMB20.3 million during the first quarter of 2010
Net loss attributable to the equity shareholders of GrenTech was RMB23.3 million (US$3.6 million ), compared to a loss of RMB22.9 million during the first quarter of 2010
Diluted loss per ADS(2)was RMB1.03 (US$0.16 ), compared to a loss of RMB0.95 per ADS during the first quarter of 2010
"Although the first quarter was affected by the typical seasonality factors in our industry, we are pleased to report some positive changes in the first quarter 2011 compared to the same period last year: Our new products started the year with positive developments in their respective industries, especially WLAN as a result of increased investment by each of the three major operators. China Mobile significantly increased its capital expenditures on WLAN in 2011, which makes WLAN one of the investment highlights in 2011 in the telecommunications industry. China Unicom and China Telecom have followed suit and increased their capital expenditure budgets on WLAN ," said Mr. Yingjie Gao, Chairman and CEO of GrenTech.
For the second quarter of 2011, GrenTech forecasts revenue to be in the range of RMB380.0 million to RMB425.0 million .
Comments & Business Outlook
Fourth Quarter Highlights :
Total revenue was RMB794.3 million (US$120.3 million )(1) , an increase of 59.0% year-over-year
Gross profit was RMB221.0 million (US$33.5 millio n ), an increase of 133.2% year-over-year
Operating income was RMB132.4 million (US$20.1 million ), compared to a loss of RMB10.0 million during the fourth quarter of 2009
Net income attributable to the equity shareholders of GrenTech was RMB102.9 million (US$15.6 million ), compared to a loss of RMB7.1 million during the fourth quarter of 2009
Diluted earnings per ADS(2) was RMB4.40 (US$0.67 ), compared to a loss of RMB0.30 per ADS during the fourth quarter of 2009
"Not only has our top line performance grown consecutively for the last several years, but we have also achieved a major breakthrough in attaining a significant improvement in profitability this year as management committed to a more robust business strategy to enhance the overall development of the Company. We are delighted to deliver outstanding fourth quarter and fiscal year 2010 results, as we were able to achieve solid growth, improve our product mix to focus on higher margin products, improve operational efficiency and strengthen internal controls, and as a result, significantly enhance our net income and margins ," said Mr. Yingjie Gao, Chairman and CEO of GrenTech.
For the first quarter of 2011, GrenTech forecasts revenue to be in the range of RMB160 million to RMB184 million .
Comments & Business Outlook
Third Quarter 2010 Financial Results
Total revenue for the third quarter was RMB396.9 million ( US$59.3 million ), representing a RMB2.0 million , a slight increase compared to the same period last year.
Net income for the third quarter of 2010 was RMB12.9 million ( US$1.9 million ) compared to a net income of RMB20.1 million in the same period of last year.
Basic and diluted earnings per common share were RMB0.02 (US$0.003) and RMB0.02 (US$0.003) , respectively, while basic and diluted earnings per ADS were RMB0 .55 (US$0.08) and RMB0.54 (US$0.08 ) , respectively.
Business Outlook
As the annual tenders by the major telecommunication operators are drawing to a close, the Company has achieved good results for its wireless coverage segment, which will have a positive impact on its fourth quarter financial performance. In addition, the Company also anticipates an improvement in the RF products segment driven by easing of Indian import restrictions as well as our launch of a RF subsystem for sale directly to telecommunication operators.
Looking ahead, management is focused on developing and launching new products to grow the business expand the customer base and improve profitability. In this respect, the successful China Mobile Multimedia Broadcasting ("CMMB") project bid win is an important milestone for the Company as it expands its customer base and addressable market and positions the Company for future growth.
The Company will also continue to explore opportunities to optimize its operations, business structure as well as product mix to achieve steady growth in business and profitability.
Guidance for Fourth Quarter 2010
For the fourth quarter of 2010, GrenTech forecasts that its revenue will be in the range of RMB720 million to RMB870 million .
