BEIJING, Jan. 10, 2018 /PRNewswire/ -- China New Borun
Corporation (NYSE: BORN) (the "Company"), a leading producer and
distributor of corn-based edible alcohol in China, today announced that its Board of
Directors (the "Board") has received a non-binding proposal letter,
dated January 10, 2018, from Mr.
Jinmiao Wang ("Mr. Wang"), Chief
Executive Officer and Chairman of the Board, and King River Holding
Limited ("King River"), a British
Virgin Island company and a majority shareholder of the Company,
proposing a "going-private" transaction to acquire all of the
outstanding ordinary shares of the Company not already owned by Mr.
Wang or King River for US$1.67 in cash per American depositary share
("ADS"), or US$1.67 per ordinary
share, which represents approximately 32.6% above the average
closing price of the Company's ADSs over the last 30 trading days
up to and including January 9, 2018.
A copy of the proposal letter is attached as Annex A to this press
release.
The Board intends to form a special committee consisting of
independent directors to consider this proposal. The Company
cautions its shareholders and others considering trading in its
securities that the Board only recently received the non-binding
proposal letter and no decisions have been made with respect to the
Company'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. The Company does not undertake any obligation to
provide any updates with respect to this or any other transaction,
except as required under applicable law.
About China New Borun Corporation
The Company is a leading producer and distributor of corn-based
edible alcohol sold as an ingredient to producers of baijiu, a
popular grain-based alcoholic beverage in China. The Company also produces DDGS Feed,
liquid carbon dioxide and crude corn oil as by-products of edible
alcohol production, and CPE that is widely used in chemical
industries. China New Borun is based
in Shouguang, Shandong Province.
Additional information about the company can be found at
http://www.chinanewborun.com and in documents filed with the U.S.
Securities and Exchange Commission, which are available on the
SEC's website at http://www.sec.gov.
Forward-looking Statements
All statements included in this press release, other than
statements or characterizations of historical fact, are
forward-looking statements. These forward-looking statements are
based on our current expectations, estimates and projections about
our industry, management's beliefs, and certain assumptions made by
us, all of which are subject to change. Forward-looking statements
can often be identified by words such as "anticipates," "expects,"
"intends," "plans," "predicts," "believes," "seeks," "estimates,"
"may," "will," "should," "would," "could," "potential," "continue,"
"ongoing," similar expressions, and variations or negatives of
these words. These forward-looking statements are not guarantees of
future results and are subject to risks, uncertainties and
assumptions that could cause our actual results to differ
materially and adversely from those expressed in any
forward-looking statement.
Contact Information
Asia Bridge Capital Limited
Michael Tieu
Phone: +86-10-8556-9033 (China)
+1-888-870-0798 (U.S.)
Email: Michael.tieu@asiabridgegroup.com
ANNEX A
January 10, 2018
The Board of Directors
China New Borun Corporation
Bohai Industrial Park, Yangkou Town, Shouguang, Shandong 267215
The People's Republic of China
Dear Sirs:
We, Jinmiao Wang ("Mr.
Wang"), Chief Executive Officer and Chairman of the Board of
Directors of China New Borun Corporation (the "Company") and
King River Holding Limited, a British Virgin Island company
("King River", together with
Mr. Wang, collectively, the "Consortium Members", and
the consortium so formed, the "Consortium"), are pleased to
submit this preliminary non-binding proposal to acquire all
outstanding ordinary shares of the Company ("Shares") not
already owned by the Consortium Members in a going private
transaction (the "Transaction"), as described below.
We believe that our proposal provides a very attractive
opportunity to the Company's shareholders. Our proposal represents
a 21.0% premium to the closing price on the last trading day prior
to the date of this proposal and a premium of 32.6% to the average
closing price during the last 30 trading days.
1. Consortium. The Consortium Members will form an
acquisition company for the purpose of implementing the
Transaction, and have agreed to work with each other exclusively in
pursuing the Transaction.
2. Purchase Price. Our proposed consideration payable for
the Shares acquired in the Transaction will be US$1.67 per Share, or US$1.67 per American Depositary Share of the
Company ("ADS", each representing one Share), in cash (in
each case other than those ADSs or Shares held by the Consortium
Members that may be rolled over in connection with the
Transaction).
3. Funding. We intend to finance the Transaction with a
combination of debt and equity capital. Equity financing is
expected to be provided in the form of rollover equity in the
Company from the Consortium Members and cash contributions from the
Consortium Members and, potentially, third party sponsors. Debt
financing is expected to be provided by loans from financial
institutions or third party sponsors. We are confident that we can
timely secure adequate financing to consummate the Transaction.
4. Due Diligence. Given the role of Mr. Wang with the
Company and existing ownership interest of the Consortium Members,
we expect the diligence needs will be quite limited. We expect that
our financing sources 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 (the "Board") 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. We believe that we
will be in a position to complete customary legal, financial and
accounting due diligence for the Transaction in a timely manner and
in parallel with discussions on the Definitive Agreements (as
defined below).
5. Definitive Agreements. We are prepared to promptly
negotiate and finalize definitive agreements (the
"Definitive Agreements") providing for the
Transaction and related transactions. These documents will provide
for representations, warranties, covenants and conditions which are
typical, customary and appropriate for transactions of this
type.
6. Process. We believe that the Transaction will provide
superior value to the Company's shareholders. We recognize that the
Board will evaluate the Transaction independently before it can
make its determination to endorse it. Given the involvement of Mr.
Wang, the Chief Executive Officer of the Company, and King River, a major shareholder of the Company,
in the Transaction, we expect that that the Board will appoint a
special committee of independent directors to consider this
proposal and make a recommendation to the Board based on its
independent evaluation of the proposal.
In considering our offer, you should be aware that the
Consortium Members are interested only in acquiring the outstanding
shares of the Company that the Consortium Members do not already
own, and that the Consortium Members do not intend to sell their
stake in the Company to any third party.
7. Confidentiality. We expect the Company to make a public
announcement in connection with receiving our proposal. However, we
are sure you will agree with us that it is in all of our interests
to ensure that we otherwise proceed in a strictly confidential
manner, unless otherwise required by law, until we have executed
Definitive Agreements or terminated our discussions.
8. No Binding Commitment. This letter constitutes only a
preliminary indication of our interest, and does not constitute any
binding commitment with respect to the Transaction. A binding
commitment will result only from the execution of Definitive
Agreements, and then will be on terms and conditions provided in
such documentation.
In closing, we would like to express our commitment to working
together to bring this Transaction 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 hearing
from you.
Sincerely,
JINMIAO WANG
/s/ Jinmiao Wang
KING RIVER HOLDINGS LIMITED
By: /s/ Junqin Shan
Name: Junqin Shan
Title: Director
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SOURCE China New Borun Corporation