CDC Corporation Files Opposition to Evolution’s Preliminary Injunction Motion
September 01 2010 - 8:46AM
Business Wire
CDC Corporation (NASDAQ: CHINA), a leading China-based
value-added operator of, and growth investor in, hybrid
(SaaS/On-Premise) enterprise software, IT Services, and New Media
assets, today announced that it has served an opposition to a
motion for preliminary injunction asserted by Evolution Capital
Management, the last remaining non-affiliated holder of the
company’s unsecured convertible debenture (Notes). In this latest
motion, Evolution has sought to restrict the company from issuing
any form of dividend to CDC Corporation shareholders and to
enforce, and determine the applicability of, certain negative
covenants in the notes.
In March 2010, CDC Corporation filed a lawsuit against Evolution
alleging breach of non-disclosure agreements, breach of the note
purchase agreement relating to Notes, breach of the Notes, and
tortious interference with business relations, seeking a recovery
in excess of $295,000,000. As previously disclosed, Evolution has
also asserted claims against CDC Corporation. In April 2010, CDC
Corporation defeated Evolution’s motion for summary judgment in
lieu of complaint. Both matters are in discovery in the Supreme
Court of the State of New York.
Based upon discovery thus far, CDC is evaluating whether to
amend its complaint to add additional claims and defendants. CDC
Corporation believes Evolution has taken substantial steps to harm
the company and its prospects by interfering with CDC’s management
and operations, and by actively pursuing other opportunities that
were detrimental to CDC and its shareholders and that were
inconsistent with its obligations as a note holder.
“We are highly disappointed and frustrated that Evolution
continues to systematically attempt to restrict our ability to
create value for our shareholders including our most recent plans
to offer dividends to CDC Corporation shareholders and we will
continue to fight this antagonistic behavior,” said Peter Yip, CEO
of CDC Corporation. “We intend to vigorously pursue our rights and
to seek damages to which we believe we are entitled, and we fully
expect to prevail when the court hears argument on this latest
motion on Sept. 8, 2010. We believe we have enough liquidity to
meet any obligations we may have under the Notes. We will also
continue to attempt to negotiate a fair and amicable solution to
this overhang, as CDC Corporation has already successfully
negotiated repurchases with all the 11 sophisticated note holders
including a partial settlement with Evolution.”
About CDC Corporation
CDC Corporation is a China-based value-added operator of, and
growth investor in, hybrid (on premise and SaaS) enterprise
software, IT, and new media businesses. The company pursues two
value-added investment strategies. The first strategy includes
actively managing majority interests in its core portfolio of
hybrid enterprise software, IT services and New Media businesses,
adding value by driving operational excellence, top-line growth and
overall profitability. The second strategy includes identifying and
executing on opportunities to co-invest with leading venture
capital and private equity funds through minority interests in
fast growth companies in emerging markets related to CDC
Corporation’s core assets. This second strategy, which complements
the first, helps to mitigate risk and enhance deal flow for the
company. CDC Corporation expects to deliver superior returns and
additional value for its shareholders through these strategies, as
well as through its plans to declare and pay regular dividends in
the form of registered shares of its publicly listed subsidiaries
and other assets. For more information about CDC Corporation
(NASDAQ: CHINA), please visit www.cdccorporation.net.
Cautionary Note Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995, including statements relating to, among other
things, our beliefs about certain steps and actions taken by
Evolution, our beliefs regarding potential damages, our beliefs
regarding the possible outcome of the New York Court’s hearing on
this motion, our beliefs regarding our liquidity position and any
potential liabilities we may have under the Notes, and our beliefs
and expectations regarding any potential settlement with Evolution.
These statements are based on management's current expectations and
are subject to risks and uncertainties and changes in
circumstances. There are important factors that could cause actual
results to differ materially from those anticipated in the
forward-looking statements, including the following: (a) the
ability to realize strategic objectives by taking advantage of
market opportunities in targeted geographic markets; (b) the
ability to make changes in business strategy, development plans and
product offerings to respond to the needs of current, new and
potential customers, suppliers and strategic partners; (c) the
ability to integrate operations or new acquisitions in accordance
with the company's and its subsidiaries’ business strategies; (d)
the effects of restructurings and rationalization of operations;
(e) the ability to address technological changes and developments
including the development and enhancement of products; (f) the
ability to develop and market successful products and services; (g)
the entry of new competitors and their technological advances; (h)
the need to develop, integrate and deploy products and services
that meet customer's requirements; (i) the possibility of
development or deployment difficulties or delays; (j) the
dependence on customer satisfaction with the company's and its
subsidiaries’ products and services; (k) continued commitment to
the deployment of the company’s and its subsidiaries’ products and
services, including enterprise software solutions; (l) risks
involved in developing software solutions and integrating them with
third-party software and services; (m) the continued ability of the
company's enterprise software solutions to address client-specific
requirements; (n) demand for, and market acceptance of, new and
existing enterprise software and services and the positioning of
the company's solutions; and (o) the outcome of any litigation,
which is uncertain. Further information on risks or other factors
that could cause results to differ is detailed in our filings or
submissions with the United States Securities and Exchange
Commission, including our Annual Report on Form 20-F for the year
ended December 31, 2009, filed with the SEC on June 30, 2010,. All
forward-looking statements included in this press release are based
upon information available to management as of the date of the
press release, and you are cautioned not to place undue reliance on
any forward looking statements which speak only as of the date of
this press release. The company assumes no obligation to update or
alter the forward looking statements whether as a result of new
information, future events or otherwise. Historical results are not
indicative of future performance.
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