China Architectural Engineering and Bondholders Enter into Conditional Waiver Related to the Proposed Acquisition of Majority St
24 Fevereiro 2010 - 10:00AM
PR Newswire (US)
ZHUHAI, China and NEW YORK, Feb. 24 /PRNewswire-Asia-FirstCall/ --
China Architectural Engineering, Inc. ("CAE" or the "Company")
(NASDAQ:CAEI), a leader in the design, engineering, fabrication and
installation of high-end building envelope systems, today announced
that it has entered into a waiver agreement with the bondholders
applicable to the proposed acquisition of a majority stake in
Shanghai ConnGame Network Co. Ltd. ("ConnGame"). As stated in the
Company's previous press release dated December 14, 2009, the
acquisition of a 60% equity interest of ConnGame and the issuance
of the 25 million CAEI shares are subject to a number of closing
conditions, including but not limited to the bondholders' waiver of
their rights to a reduction in the conversion price of the
Company's outstanding convertible bonds and exercise price of the
related warrants as a result of the proposed acquisition. On
February 24, 2010, the bondholders entered into an Amendment and
Waiver Agreement and agreed to waive their rights to a reduction in
the bond conversion prices and warrant exercise prices for up to
three months. In exchange, the Company agreed to make payments of
the bonds' interest in arrears and interest due in April 2010, in
addition to repayment of a separate banking facility. Completion of
the proposed acquisition is subject to negotiation and execution of
a definitive equity transfer agreement, regulatory approvals, and
other customary closing conditions. At closing of the acquisition
and upon receiving 25 million CAEI shares, First Jet will become
CAE's largest shareholder, and it is expected that Mr. Jun Tang,
who is First Jet's largest shareholder, will be appointed CAE's new
Chairman of the Board. Mr. Tang commented, "I greatly look forward
to joining China Architectural Engineering's board of directors as
its new Chairman. I am highly impressed with Mr. Luo's business and
technical vision to leverage the unique, complementary strengths of
CAE and ConnGame to transform CAE into a high-end architectural
design consultant and service provider, while also expanding into
China's growing online game market. I am convinced that CAE and
ConnGame share a common culture of technical excellence, and
therefore, I am confident that the eventual integration of our
businesses and technologies will result in a greater new CAE." Mr.
Ken Yi Luo, the Company's Chief Executive Officer and Chairman,
commented, "We are appreciative of the support of our bondholders
and excited by the prospect of soon welcoming Mr. Tang as our new
Chairman. Mr. Tang's proven leadership, deep technical expertise,
and prior success in the gaming industry will be invaluable in
helping to integrate and transform the new CAE, enabling us to not
only continue to take greater advantage of our core architectural
engineering and design market but also China's large and rapidly
growing online game market. I truly look forward to working closely
with Mr. Tang to grow our combined businesses and to deliver
greater value to our supportive shareholders." Overview of
Conversion Price of the Bonds Pursuant to the trust deeds that
govern the Company's outstanding Variable Rate Convertible Bonds
due 2012 (the "2007 Bonds") and 12% Convertible Bonds due 2011 (the
"2008 bonds," and collectively with the 2007 Bonds, the "Bonds")
and the warrants to purchase 300,000 shares of common stock of the
Company expiring 2013 (the "2008 Warrants"), the conversion price
of the Bonds and the exercise price of the 2008 Warrants shall
adjust downward if the Company issues shares at a per share price
that is less than the current conversion price of the Bonds or
exercise price of the 2008 Warrants. The 2007 Bonds are currently
exercisable at $2.45 per share and the 2008 Bonds and 2008 Warrants
are currently convertible and exercisable at $6.35 per share.
According to the agreed upon terms of the acquisition, one of the
conditions to the acquisition is the bondholders agreeing to waive
their rights to a reduction in the conversion price of the Bonds
and exercise price of the 2008 Warrants due to the issuance of the
Shares. About Shanghai ConnGame Shanghai ConnGame, founded and led
by seasoned experts with extensive previous success in China's
online game industry, develops and operates MMORPGs in China.
Leveraging its innovative game engines, scalable development
platforms, and accomplished production teams, ConnGame focuses on
self-developed MMORPGs game titles that are based on China's iconic
characters and nostalgic epochs. About China Architectural
Engineering China Architectural Engineering, Inc. (NASDAQ:CAEI) is
a leader in the design, engineering, fabrication and installation
of high-end curtain wall systems, roofing systems, steel
construction systems, and eco-energy systems. Founded in 1992, CAEI
has maintained its market leadership by providing timely,
high-quality, reliable, fully integrated, and cost-effective
solutions. Collaborating with world-renowned architects and
building engineers, the Company has successfully completed over one
hundred large, complex and unique projects worldwide, including
numerous award-winning landmarks across Asia's major cities. For
further information on China Architectural Engineering, Inc.,
please visit http://www.caebuilding.com/ Forward-Looking Statements
In addition to historical information, the statements set forth
above may include forward-looking statements that may involve risk
and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Actual
results could differ materially from the expectations contained in
forward-looking statements as a result of risks and uncertainties,
including, but not limited to, the negotiation and execution of a
definitive acquisition agreement for the proposed acquisition;
satisfactory completion of due diligence; closing conditions
including but not limited to regulatory approvals; required Company
payments under the waiver agreement; difficulties related to
integration and management of the combined operations; reduction or
reversal of the Company's recorded revenue or profits due to
"percentage of completion" method of accounting and expenses; the
Company's ability to obtain a modification for the Waiver agreement
with the bondholders applicable to the proposed acquisition of
ConnGame; increasing provisions for bad debt related to the
Company's accounts receivable; fluctuation and unpredictability of
costs related to our products and services; the Company's plans to
enter into real estate development projects such as the Nine
Dragons Project; adverse capital and credit market conditions;
fluctuation and unpredictability of costs related to the Company's
products and services; expenses and costs associated with its
convertible bonds, regulatory approval requirements and competitive
conditions. These and other factors that may result in differences
are discussed in greater detail in the Company's reports and other
filings with the Securities and Exchange Commission. For more
information, please contact: Investor Contact: ICR: Michael Tieu
Tel: +86-10-6599-7960 Email: Bill Zima Tel: +1-203-682-8200 Email:
DATASOURCE: China Architectural Engineering, Inc. CONTACT: Michael
Tieu, +86-10-6599-7960, , or Bill Zima, +1-203-682-8200, , both of
ICR Web site: http://www.caebuilding.com/
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