SHANGHAI, Nov. 6, 2024
/PRNewswire/ -- Cango Inc. (NYSE: CANG) ("Cango" or the "Company"),
a leading automotive transaction service platform in China, today announced that it has entered
into agreements to purchase on-rack crypto mining
machines with an aggregate hashrate of 50 Exahash per second ("EH")
for total considerations valued at approximately US$400 million from a group of sellers. The
largest seller will be Bitmain Technologies Georgia Limited and
Bitmain Development Limited (together, "Bitmain"), a leading
manufacturer of digital currency mining servers, and the Company
has agreed to purchase from Bitmain on-rack crypto
mining machines with an aggregate hashrate of 32EH for a total
purchase price of US$256 million in
cash (the "Cash-Settled Transaction"). The Company has also agreed
to purchase the remaining on-rack crypto mining
machines with an aggregate hashrate of 18EH from Golden TechGen
Limited ("GT"), a company incorporated under the laws of the
British Virgin Islands and wholly
owned by Mr. Max HUA ("Mr. Hua"), former chief financial officer of
Bitmain and the sole shareholder of GT, and certain other sellers,
and will pay the purchase price through issuance of an aggregate of
approximately 145,658,192 Class A ordinary shares of the Company
(valued at US$144 million) to the
sellers in proportion to the aggregate hashrate of the machines to
be sold by each seller (the "Share-Settled Transactions", and
together with the Cash-Settled Transaction, the "Proposed
Transactions").
Upon closing of the Share-Settled Transactions, GT, which is
expected to be the largest seller in these transactions, will own
no more than 20% of the Company's total outstanding shares, and all
the sellers in the Share-Settled Transactions will in the aggregate
own approximately 37.8% of the Company's total outstandings shares
before any exercise of the warrants described below. The
Company also agreed to grant Mr. Hua the right to nominate and
appoint two directors of the Company until Mr. Hua and his
affiliates cease to hold more than 5% of the Company's total
outstanding shares. If the market capitalization of the Company
calculated based on the daily volume-weighted average trading price
of the Company's ADSs over any consecutive 30-trading days during
the 30-month period after closing of the Share-Settled Transactions
reaches US$1,825,000,000 (the "Bonus
Triggering Event"), the Company agreed to issue at par value
approximately 97,105,461 additional Class A ordinary shares to all
the sellers in the Share-Settled Transactions as bonus payment in
proportion to the aggregate hashrate of the machines to be sold by
each seller, and the Company agreed to issue warrants to the
sellers that will allow them to exercise such rights within 3
months after the Bonus Triggering Event. Furthermore, if the
net asset value (after certain adjustments) of the Company's
existing business in China is
reduced by RMB50 million or more by
the end of 2026 as compared to such value as of September 30, 2024 (the "Adjustment Event"), the
Company will be required to issue additional Class A ordinary
shares to the Sellers based on the reduced amount. While all the
Class A ordinary shares will be issued to the sellers in
transactions that are not subject to or exempted from the
registration requirement of the U.S. Securities Act of 1933, the
Company has granted certain registration rights to the sellers with
respect to the shares. The Company will seek shareholders' approval
to amend its memorandum and articles of association to increase the
Company's total authorized share capital as necessary to effect any
share issuance, including under the Bonus Triggering Event or
Adjustment Event. As the Company's co-founders, Mr. Xiaojun Zhang and Mr. Jiayuan Lin (the "Co-founders"), will continue
to own all the Class B ordinary shares of the Company with
super-voting power, the Co-founders are expected to continue to own
more than two-thirds of the aggregate voting power of the Company's
total outstanding shares (assuming full exercise of the warrants
described above) and maintain their control over the Company after
completion of the Proposed Transactions.
Closing of the Cash-Settled Transaction will be subject to
various customary closing conditions, including anti-trust
clearance in the U.S. ("Anti-trust Clearance"), among others.
Closing of the Share-Settled Transactions will be subject to
similar customary closing conditions as in the Cash-Settled
Transaction, as well as the satisfactory performance of the mining
machines to be delivered by the sellers in the Share-Settled
Transactions ("Performance Condition") and NYSE's authorization of
the Company's supplemental listing application with respect to the
Class A ordinary shares to be issued at the closing of the
Share-Settled Transactions. While the Company currently
expects to close the Proposed Transactions on or before
March 31, 2025, there can be no
assurance that the closing conditions will be satisfied nor that
the Proposed Transactions will be completed before that date or at
all. If the Cash-Settled Transaction fails to close due to
failure to receive the Anti-trust Clearance, the deposit in an
amount of US$25.6 million paid by the
Company to Bitmain will be forfeited and retained by Bitmain. If
the Cash-Settled Transaction has closed but the Share-Settled
Transactions fail to close because the Performance Condition is not
satisfied, Northstar Management (HK) Limited ("Northstar"), a
business parnter of GT, has agreed to find buyers to purchase all
the mining machines that the Company acquired from Bitmain in the
Cash-Settled Transaction at price not lower than the original price
that the Company agreed to pay.
The mining machines that the Company agreed to purchase in the
Proposed Transactions are currently in active mining operation and
hosted in data centers in several countries outside China, with the majority located in the
U.S. The Company expects to continue to host the machines in
their exsiting data centers and expects to engage an affiliate of
Bitmain to provide operational and maintenance services for the
machines after closing the Proposed Transactions.
Regardless of whether the Proposed Transactions are completed,
the Company will continue to operate its existing business, and
will continue to invest in its existing business and expand such
business outside of China.
In particular, the Company will continue to strengthen Cango
U-car's competitive advantage in vehicle inventory by establishing
strategic partnerships with used car marketplaces. For its
international used car platform, AutoCango.com, the Company will
continue to refine its content development and search engine
optimization to boost brand exposure and expand its market reach
outside of China. If the Proposed
Transactions are completed, the Company will start to generate
revenues from crypto mining operations, and the
Company's management currently expects that revenues from
crypto mining may comprise the vast majority of the
Company's total revenues before its existing business achieves
substantial growth outside of China.
About Cango Inc.
Cango Inc. (NYSE: CANG) is a leading automotive transaction
service platform in China,
connecting car buyers, dealers, financial institutions, and other
industry participants. Founded in 2010 by a group of pioneers in
China's automotive finance
industry, the Company is headquartered in Shanghai and has a nationwide network.
Leveraging its competitive advantages in technological innovation
and big data, Cango has established an automotive supply chain
ecosystem, and developed a matrix of products centering on customer
needs for auto transactions, auto financing and after-market
services. By working with platform participants, Cango endeavors to
make car purchases simple and enjoyable, and make itself customers'
car purchase service platform of choice. For more information,
please visit: www.cangoonline.com.
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the
United States Private Securities Litigation Reform Act of 1995.
These forward-looking statements can be identified by terminology
such as "will," "expects," "anticipates," "future," "intends,"
"plans," "believes," "estimates" and similar statements. Among
other things, the "Business Outlook" section and quotations from
management in this announcement, contain forward-looking
statements. Cango may also make written or oral
forward-looking statements in its periodic reports to the SEC, in
its annual report to shareholders, in press releases and other
written materials and in oral statements made by its officers,
directors or employees to third parties. Statements that are not
historical facts, including statements about Cango's beliefs and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
factors could cause actual results to differ materially from those
contained in any forward-looking statement, including but not
limited to the following: Cango's goal and strategies; Cango's
expansion plans; Cango's future business development, financial
condition and results of operations; Cango's expectations regarding
demand for, and market acceptance of, its solutions and services;
Cango's expectations regarding keeping and strengthening its
relationships with dealers, financial institutions, car buyers and
other platform participants; general economic and business
conditions; and assumptions underlying or related to any of the
foregoing. Further information regarding these and other risks is
included in Cango's filings with the SEC. All information provided
in this press release and in the attachments is as of the date of
this press release, and Cango does not undertake any obligation to
update any forward-looking statement, except as required under
applicable law.
Investor Relations Contact
Yihe Liu
Cango Inc.
Tel: +86 21 3183 5088 ext.5581
Email: ir@cangoonline.com
Helen Wu
Piacente Financial Communications
Tel: +86 10 6508 0677
Email: ir@cangoonline.com
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SOURCE Cango Inc.