BEIJING, Sept. 4, 2013 /PRNewswire/ -- China
Hydroelectric Corporation (NYSE: CHC, CHCWS) ("China Hydroelectric"
or the "Company"), an owner, developer and operator of small
hydroelectric power projects in the
People's Republic of China ("PRC"), today announced that its
Board of Directors has received a preliminary non-binding proposal
letter, dated September 4, 2013, from
NewQuest Capital Partners, through its affiliated entity, CPI
Ballpark Investments Ltd, and on behalf of its affiliates and the
funds managed by it (collectively, "NewQuest"). According to
the proposal letter, NewQuest is interested in acquiring all of the
Company's outstanding ordinary shares, including ordinary shares
represented by the Company's American depositary shares or "ADSs"
(each representing three ordinary shares of the Company), at a
price of $0.99 in cash per ordinary
share or $2.97 in cash per ADS.
NewQuest currently owns 80,777,569 ordinary shares of the
Company, representing approximately 49.83% of the total outstanding
ordinary shares of the Company. In addition, as further
disclosed in its beneficial ownership report on Schedule 13D filed
with the SEC on September 4, 2013,
NewQuest also holds options and warrants to acquire ordinary shares
of the Company, which, if exercised in full, would increase its
ownership of the Company to approximately 56.8% of the Company's
outstanding ordinary shares.
NewQuest's proposal letter specifies that its proposal
constitutes only a preliminary indication of its interest, and is
subject to negotiation and execution of definitive agreements
relating to the proposed transaction. A copy of the proposal letter
is attached hereto as Exhibit A.
The Company's Board of Directors, other than the Chairman of the
Board of Directors, Mr. Amit Gupta,
who is also a partner of NewQuest, is reviewing and evaluating
NewQuest's proposal and cautions the Company's shareholders and
others considering trading in its securities that the Board of
Directors has just received the proposal letter and has not made
any decisions with respect to the Company's response to the
proposal. There can be no assurance that any definitive offer will
be made by NewQuest or any other person, that any definitive
agreement will be executed relating to the proposed transaction, or
that the proposed transaction or any other transaction will be
approved or consummated.
About China Hydroelectric Corporation
China Hydroelectric Corporation (NYSE: CHC, CHCWS) ("China
Hydroelectric" or "the Company") is an owner, developer and
operator of small hydroelectric power projects in China. Through its geographically diverse
portfolio of operating assets, the Company generates and sells
electric power to local power grids. The Company's primary business
is to identify, evaluate, acquire, develop, construct and finance
hydroelectric power projects. The Company currently owns 25
operating hydropower stations in China with total installed capacity of 517.8
MW, of which it acquired 21 operating stations and constructed
four. These hydroelectric power projects are located in four
provinces: Zhejiang, Fujian, Yunnan and Sichuan. Hydropower is an
important factor in meeting China's electric power needs, accounting for
approximately 22% of total nation-wide capacity.
Cautionary Statement concerning Forward Looking
Statements
This news release may include certain statements that are not
descriptions of historical facts, but are forward-looking
statements. These forward-looking statements can be identified by
terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar statements.
Forward-looking statements involve risks, uncertainties and other
factors that could cause actual results to differ materially from
those contained in any such statements. Potential risks and
uncertainties include, but are not limited to, risks discussed in
China Hydroelectric's filings with
the U.S. Securities and Exchange Commission. China Hydroelectric
does not undertake any obligation to update any forward-looking
statement, except as required under applicable law.
For further information about China Hydroelectric, please visit
the Company's website at http://www.chinahydroelectric.com.
For more information, please contact:
China Hydroelectric
Corporation
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Scott Powell
Investor Relations and Corporate Communications
Phone (U.S.): +1-646-650-1351
Email: ir@china-hydro.com
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James Hull
Financial Analyst
Phone (China): +86-10-6408-2341
Email: james.hull@chinahydroelectric.com
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ICR, LLC
Gary Dvorchak, CFA
Senior Vice President
Phone (China): +86-10-6583-7500
Phone (U.S.): +1 (310) 954-1123
Email: gary.dvorchak@icrinc.com
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Exhibit A
September 4, 2013
The Board of Directors
China Hydroelectric Corporation
2105A, Ping'an International Financial Center,
No. 3 South Xinyuan Street
Chaoyang District, Beijing,
100027
People's Republic of China
Dear Sirs / Madam:
NewQuest Capital Partners, through its affiliated entity, CPI
Ballpark Investments Ltd. ("CPI Ballpark"), and on behalf of its
affiliates and the funds managed by it (together, "NewQuest"), are
pleased to submit this preliminary non-binding proposal to acquire
all of the outstanding ordinary shares of China Hydroelectric
Corporation (the "Company") not already owned by CPI Ballpark in a
going private transaction (the "Acquisition") as described
below. Currently, NewQuest beneficially owns 80,777,569
ordinary shares of the Company, which include 3,371,502 American
Depositary Shares of the Company ("ADSs," with each ADS
representing three ordinary shares of the Company) and 70,663,063
ordinary shares of the Company, representing 49.83% of the total
outstanding ordinary shares of the Company based on the total
number of outstanding ordinary shares as of June 30, 2013 (as reported by the Company on Form
6-K dated August 15, 2013).
We believe that our proposal of US$2.97 in cash per ADS, or US$0.99 in cash per ordinary share of the
Company, provides a very attractive opportunity to the Company's
shareholders to realize superior value, and we are confident that
we can successfully close the Acquisition as outlined below.
Our proposal represents a premium of 33.2% over the closing
price of the ADSs on September 3,
2013 and a premium of 35.8% over the volume-weighted average
closing price of the ADSs during the last 30 trading days.
The terms and conditions upon which we are prepared to pursue
the Acquisition are set forth below:
1. Sponsor. NewQuest will be the sole sponsor for
the Acquisition. In addition to 80,777,569 ordinary shares of
the Company beneficially owned by NewQuest, NewQuest also has the
option to acquire (i) 6,959,893 ordinary shares of the Company
pursuant to an option agreement between CPI Ballpark and Vicis
Capital Master Fund, and (ii) 10,004,157 ordinary shares of the
Company pursuant to a warrant issued by the Company. Please
refer to our Schedule 13D for the terms of our options and
warrant.
2. Purchase Price. The consideration payable in the
Acquisition will be US$2.97 in cash
for each ADS and US$0.99 in cash per
ordinary share of the Company, in each case other than the ADSs or
ordinary shares held by CPI Ballpark or that may be rolled over by
other shareholders in connection with the Acquisition.
3. Closing Certainty and Funding. Given our shareholding
and familiarity with the Company, we believe that we are able to
offer a high degree of closing certainty and that we are well
positioned to negotiate and complete the Acquisition on an
expedited basis. We intend to finance the Acquisition with a
combination of capital from our fund and additional financing to be
finalized with our financing partners. We expect definitive
commitments for any additional financing to be in place when the
Definitive Agreements (as defined below) are signed.
4. Due Diligence. As an existing shareholder, we believe
that we will be in a position to complete our due diligence for the
Acquisition on an expedited basis and in parallel with the parties'
negotiation of the Definitive Agreements.
5. Definitive Agreements. We are prepared to promptly
negotiate and finalize mutually satisfactory definitive agreements
with respect to the Acquisition (the "Definitive
Agreements"). The Definitive Agreements will provide for
representations, warranties, covenants and conditions that are
typical, customary and appropriate for transactions of this
type.
6. Process. We believe it is prudent and in the best
interests of the Company for the Company's Board of Directors to
establish a special committee of independent directors to consider
the Acquisition.
In considering our offer, you should be aware that we are
interested only in acquiring the outstanding ordinary shares of the
Company that CPI Ballpark does not already beneficially own and
which are not expected to be rolled over in connection with the
Acquisition, and that we do not currently have any intention to
sell our stake in the Company to a third party.
7. About NewQuest. NewQuest was established in 2011 from
the spin out of Bank of America Merrill Lynch's Asian Private
Equity team. NewQuest has extensive experience in sourcing,
executing, managing, and divesting private equity and special
situation stakes across Asia. NewQuest, through CPI Ballpark,
has been a key shareholder of the Company since January 2008, and we believe we are in a unique
position to offer superior value to the Company's shareholders.
8. Advisor. NewQuest has engaged Weil, Gotshal &
Manages LLP as its legal counsel in connection with the
Acquisition.
9. Public Disclosure. This letter will be promptly filed and
disclosed to the public in accordance with applicable securities
regulations.
10. No Binding Commitment. This letter constitutes only a
preliminary indication of our interest, and does not constitute an
offer capable of acceptance or any binding commitment with respect
to the Acquisition. A binding commitment will result only
from the execution of Definitive Agreements, and then will be on
the terms and conditions provided therein.
We are very excited about the Acquisition and hope that you are
interested in proceeding in a manner consistent with our
proposal. We believe that we are uniquely positioned to
provide a compelling opportunity for the shareholders of the
Company on a highly expedited timeframe. Should you have any
questions concerning this letter, please feel free to contact us at
any time.
We look forward to hearing from you.
Very truly yours,
CPI Ballpark Investments Ltd.
/s/ Georges A Robert_____
Name: Georges A Robert
Title: Director
SOURCE China Hydroelectric Corporation