WUHAN, China, Aug. 31, 2017 /PRNewswire/ -- China Automotive
Systems, Inc. (NASDAQ: CAAS) ("CAAS" or the "Company"), a
leading power steering components and systems supplier in
China, today announced that the
special committee (the "Special Committee") of its Board of
Directors (the "Board") previously formed to evaluate and consider
a preliminary non-binding proposal submitted by Mr. Hanlin Chen ("Mr. Chen") to the Board on
May 14, 2017 (the "Original
Proposal") has received a revised non-binding proposal letter (the
"Revised Proposal"), dated August 30,
2017, from Mr. Chen and Chariot Company (Cayman) Limited
(together with its affiliates, "NHPEA"), to acquire all of the
outstanding shares of common stock of the Company not already
beneficially owned by Mr. Chen, Wiselink Holdings Limited, a
company controlled by Mr. Chen, and Ms. Liping Xie, his wife (collectively, the
"Chairman Parties", and together with NHPEA, the "Buyer Group"),
and their respective affiliates, for US$5.45 per share of common stock in cash. The
Buyer Group and their affiliates currently beneficially own
approximately 56.4% of the issued and outstanding shares of common
stock of the Company on a fully diluted and as-converted
basis. The Revised Proposal supersedes and replaces the
Original Proposal in its entirety. The Revised Proposal is
expressly conditioned on approval by the Special Committee and is
subject to a non-waivable condition requiring approval by a
majority vote of the Company's unaffiliated stockholders. A copy of
the Revised Proposal letter is attached to this press release.
The Special Committee is currently evaluating the Revised
Proposal with the assistance of its financial and legal
advisors. The Company cautions the Company's stockholders and
others considering trading in the Company's securities that no
decisions have been made by the Special Committee or the Board with
respect to the Revised Proposal. There can be no assurances that
any definitive offer will be made, that any definitive agreement
will be executed relating to the Revised Proposal or any other
transaction, 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 Automotive Systems, Inc.
Based in Hubei Province,
the People's Republic of China,
China Automotive Systems, Inc. is a leading supplier of power
steering components and systems to the Chinese automotive industry,
operating through eight Sino-foreign joint ventures. The Company
offers a full range of steering system parts for passenger
automobiles and commercial vehicles. The Company currently offers
four separate series of power steering with an annual production
capacity of over 5.5 million sets of steering gears, columns and
steering hoses. Its customer base is comprised of leading auto
manufacturers, such as China FAW Group, Corp., Dongfeng Auto Group
Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd.
and Chery Automobile Co., Ltd. in China, and Chrysler Group LLC in North America. For more information, please
visit: http://www.caasauto.com.
Forward Looking Statements
This press release contains statements that are "forward-looking
statements" as defined under the Private Securities Litigation
Reform Act of 1995. Forward-looking statements represent our
estimates and assumptions only as of the date of this press
release. These forward-looking statements include statements
regarding the qualitative and quantitative effects of the
accounting errors, the periods involved, the nature of the
Company's review and any anticipated conclusions of the Company or
its management and other statements that are not historical facts.
Our actual results may differ materially from the results described
in or anticipated by our forward-looking statements due to certain
risks and uncertainties. As a result, the Company's actual results
could differ materially from those contained in these
forward-looking statements due to a number of factors, including
those described under the heading "Risk Factors" in the Company's
Form 10-K annual report filed with the Securities and Exchange
Commission on March 30, 2017, and in documents subsequently
filed by the Company from time to time with the Securities and
Exchange Commission. We expressly disclaim any duty to provide
updates to any forward-looking statements made in this press
release, whether as a result of new information, future events or
otherwise.
For further information, please contact:
Jie Li
Chief Financial Officer
China Automotive Systems, Inc.
Email: jieli@chl.com.cn
Kevin Theiss
Investor Relations
+1-646-726-6511
Email: Kevin.Theiss@awakenlab.com
August 30, 2017
The Special Committee of the Board of Directors
China Automotive Systems, Inc.
No. 1 Henglong Road, Yu Qiao Development Zone
Shashi District, Jing Zhou City, Hubei
Province
The People's Republic of China
Dear Sirs:
On May 14, 2017, Mr. Hanlin Chen ("Mr. Chen"), Chairman of China
Automotive Systems, Inc. (the "Company"), submitted a non-binding
preliminary proposal (the "Chen Proposal") to the board of
directors of the Company (the "Board") to acquire all of the
outstanding shares of common stock ("Common Stock") of the Company
not already owned by him and his affiliates in a going-private
transaction.
Mr. Chen also requested that the Board approve, for purposes of
Section 203 of the General Corporation Law of the State of Delaware (the "DGCL") that Mr. Chen
and Chariot Company (Cayman) Limited (together with its affiliates,
"NHPEA"), an affiliate of North Haven Private Equity Asia IV, L.P.,
could discuss and enter into a consortium agreement with each
other, and jointly submit a proposal with respect to the
Acquisition (as defined below) to the special committee of
independent directors of the Company (the "Special Committee").
On August 22, 2017, upon the
recommendation of the Special Committee, the Board, through a
unanimous written consent in lieu of a special meeting, adopted
resolutions that expressly permit Mr. Chen and his affiliates,
including Wiselink Holdings Limited, a company controlled by Mr.
Chen, and Ms. Liping Xie, his wife
(collectively, the "Chairman Parties"), and NHPEA to, among other
things, discuss and enter into a consortium agreement with each
other and jointly submit a proposal with respect to the Acquisition
to the Special Committee, and approved that none of the Chairman
Parties and NHPEA shall be deemed an "interested stockholder" of
the Company under Section 203 of the DGCL by reason of forming the
Buyer Group (as defined below) or submitting a joint Acquisition
proposal.
The Chairman Parties and NHPEA (the "Buyer Group", "we" or "us")
are pleased to submit this non-binding preliminary proposal (the
"Joint Proposal") to the Special Committee, which shall supersede
and replace the Chen Proposal in its entirety. The Buyer Group
proposes to acquire all of the outstanding shares of Common Stock
of the Company not already owned by the Chairman Parties and their
respective affiliates (the "Acquisition") at US$5.45 in cash per share, which represents a
premium of approximately 22.5% to the Company's closing price on
May 12, 2017.
The Buyer Group and its affiliates currently, in the aggregate,
beneficially own approximately 56.4% of the issued and outstanding
shares of Common Stock of the Company on a fully diluted and
as-converted basis. The terms and conditions upon which we are
prepared to pursue the Acquisition are set forth below. We
are confident in our ability to consummate an Acquisition as
outlined in this letter.
1. Buyer. We intend to form an acquisition vehicle
for the purpose of pursuing the Acquisition (the "Acquisition
Vehicle"). The Acquisition will be in the form of a merger of the
Company with the acquisition vehicle. We are interested only in
pursuing this Acquisition and are not interested in selling the
shares of Common Stock of the Company already owned by the Chairman
Parties.
2. Purchase Price. Our proposed consideration
payable for the Company's Common Stock acquired in the Acquisition
will be US$5.45 in cash per
share.
3. Financing. We intend to finance the Acquisition
with a combination of debt and equity capital. Equity
financing is expected be provided by the Buyer Group in the form of
rollover equity in the Company and cash contributions from us
and/or third party sponsors. Debt financing is expected to be
provided by loans from third party financial institutions. We
expect definitive commitments for the required equity and debt
financing, subject to terms and conditions set forth therein, to be
in place when the Definitive Agreements (as defined below) are
signed with the Company.
4. Due Diligence. We and our financing sources are
in a position to commence customary business, financial and legal
due diligence on the Company immediately, and we expect to be able
to complete due diligence on a highly expedited basis. In addition,
we are prepared to engage in substantive discussions with the
Special Committee regarding the Definitive Agreements in parallel
with our due diligence exercise.
5. Definitive Agreements. We have engaged Skadden,
Arps, Slate, Meagher & Flom LLP as our U.S. legal
counsel. We are prepared to negotiate and finalize mutually
satisfactory definitive agreements with respect to the Acquisition
(the "Definitive Agreements") expeditiously. This proposal is
subject to execution of the Definitive Agreements. The
Definitive Agreements will provide for representations, warranties,
covenants and conditions which are typical, customary and
appropriate for transactions of this type.
6. Confidentiality. Members of the Buyer Group
will, as required by law, promptly file a Schedule 13D with the
U.S. Securities and Exchange Commission to disclose this Joint
Proposal. We are sure you will agree with us that it is in
all of our interests to ensure that we proceed our discussions
relating to the Acquisition in a confidential manner, unless
otherwise required by law, until we have executed the Definitive
Agreements or terminated our discussions.
7. Process. We believe that the Acquisition will
provide superior value to the Company's stockholders. We
recognize of course that the Board will evaluate the proposed
Acquisition independently before it can make its determination
whether to endorse it. In addition, we expect that the Special
Committee will consider our proposal carefully and make a
recommendation to the Board. We will not move forward with the
Acquisition unless it is approved by the Special Committee.
In addition, we request that the Acquisition shall be subject to a
non-waivable condition requiring approval by majority shareholders'
vote of shareholders other than the Buyer Group and its
affiliates.
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
Acquisition. Such a commitment will result only from the
execution of Definitive Agreements, and then will be on the terms
provided in such documentation.
In closing, we would like to express our commitment to working
together with you to bring the Acquisition 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 speaking with you.
[Signature Page to Follow]
Sincerely,
Hanlin Chen
on behalf
of the Chairman Parties
_/s/ Hanlin
Chen________________________
Chariot Company (Cayman) Limited
By: _/s/ Ivan John
Sutlic_____________________
Name: Ivan John Sutlic
Title: Authorized Signatory
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SOURCE China Automotive Systems, Inc.