China Growth Equity Investment Ltd. to Merge with China Dredging
Group Co., Ltd. and Acquire Fujian Provincial Pingtan County Ocean
Fishing Group Co., Ltd.
NEW YORK, Oct 25, 2012 /PRNewswire/ -- China Growth
Equity Investment Ltd. (Nasdaq: CGEI; CGEIU; CGEIW) ("CGEI"), a
special purpose acquisition company ("SPAC"), China Dredging Group
Co., Ltd. ("CDGC") and Fujian Provincial Pingtan County Ocean
Fishing Group Co., Ltd. ("Pingtan Fishing") today announced that
CGEI and CDGC have entered into a definitive merger agreement for
CGEI to merge with CDGC and that CGEI and Pingtan Fishing have
entered into a definitive agreement for CGEI to acquire Pingtan
Fishing. The parties expect the transactions to provide CDGC
and Pingtan Fishing with necessary financial resources for the
companies' next stage of growth.
CDGC, a British Virgin Islands
holding company, is one of the leading independent (not
state-owned) providers of dredging services in the PRC through its
PRC subsidiary Fujian Xing Gang Port Service Co., Ltd., or
Fujian Service. Pingtan Fishing is a
rapidly growing fishing company and provider of quality seafood in
the PRC.
The combined entity, which will be renamed "Pingtan Marine
Enterprise Ltd.," intends to apply to be listed on NASDAQ under the
ticker symbol "PME". Upon completion of the merger and the
acquisition, successful entrepreneur Xinrong Zhuo, the founder, Chairman and
controlling shareholder of both CDGC and Pingtan Fishing will be
the chairman of the combined company.
The business combination is subject to the approval of CGEI's
shareholders as well as other customary closing conditions.
Assuming the closing conditions are met, the business combination
is expected to be completed during the first quarter of 2013.
Pro forma fiscal year 2011 revenues and net income for CGEI,
CDGC and Pingtan Fishing were $252.6
million and $106.8 million,
respectively. For the 6 months ending June
30, 2012, pro forma combined revenues were $145.0 million and net income was $49.4 million.
"CGEI's combination with CDGC and Pingtan Fishing is the
culmination of our search for a successful company with a proven
track record of profitability and attractive growth prospects,"
said Xuesong Song, China Growth's
board chairman. "We believe that CDGC's highly profitable dredging
business represents a unique opportunity as one of the largest
dredging providers in China.
Pingtan Fishing provides the combined company with a strong and
fast growing platform in a fragmented industry."
Added Mr. Zhuo, the Chairman of CDGC: "We are truly excited
about the immediate positive impact of the capital this transaction
will provide to help Pingtan Marine Enterprise execute on its
long-term growth strategy with greater access to capital and a
public currency to support additional future growth."
Transaction Summary
As part of the business combination, each CDGC ordinary or Class
A preferred share will be exchanged for 0.82947 ordinary shares of
CGEI. The shareholders of Pingtan Fishing will receive an aggregate
of 25,000,000 CGEI ordinary shares. Upon completion of the business
combination, CGEI shareholders will own approximately 7.75% of the
outstanding ordinary shares of the combined company, assuming no
redemptions by CGEI shareholders. After the closing, CGEI will have
approximately 78,962,376 ordinary shares outstanding, valuing the
company at approximately $783
million.
Reed Smith LLP provided legal counsel to CGEI. DLA Piper LLP
(US) provided legal counsel to CDGC.
About CGEI
China Growth Equity Investment Ltd. (Nasdaq: CGEI; CGEIU;
CGEIW), or CGEI, is a special purpose acquisition company ("SPAC"),
also known as a blank-check company incorporated as a Cayman Islands-exempted company. CGEI intends
to use the net proceeds from its initial public offering for the
purpose of acquiring one or more operating companies through a
merger, share capital exchange, asset acquisition, share purchase,
reorganization or similar business combination.
About CDGC
Through its PRC subsidiary, Fujian
Service, CDGC provides specialized dredging services
exclusively to the PRC marine infrastructure market and is, based
on the number and capacity of the dredging vessels it operates, one
of the leading independent (not state-owned) providers of such
services in the PRC. Since its inception, CDGC has functioned
exclusively as a specialist subcontractor, performing dredging
services for other companies licensed to function as general
contractors. CDGC engages in capital dredging, maintenance dredging
and reclamation dredging projects and primarily sources its
projects by subcontracting projects from general contractors.
About Pingtan Fishing
Pingtan Fishing primarily engages in ocean fishing with many of
its self-owned vessels operating within the Indian Exclusive
Economic Zone and the Arafura Sea of Indonesia. Pingtan Fishing is a rapidly
growing fishing company and provider of quality seafood in the
PRC.
Disclaimer
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which the offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
Additional Information
In connection with the proposed business combination, CGEI will
prepare and file with the U.S. Securities and Exchange Commission
(the "SEC") a proxy statement. When completed, a definitive proxy
statement and a form of proxy will be mailed to the shareholders of
CGEI. Before making any voting decision, shareholders are urged to
read the proxy statement carefully and in its entirety because it
will contain important information about the proposed merger.
Shareholders will be able to obtain, without charge, a copy of the
proxy statement and other relevant documents filed with the SEC
when they become available through the SEC's website at
http://www.sec.gov. Shareholders will also be able to obtain,
without charge, a copy of the proxy statement and other relevant
documents when they become available by contacting CGEI's Corporate
Secretary, Chantelle Bai, at CN11
Legend Town, No.1 Balizhuangdongli, Chaoyang District, Beijing, 100025, P.R.C., telephone number
(+86-10-6550-3186), or by email to cbai@chum.com.cn.
Forward-Looking Statements
This press release contains forward-looking statements that
reflect CGEI's, CDGC's and Pingtan Fishing's current beliefs,
expectations or intentions regarding future events. Any
statements contained in this press release that are not statements
of historical fact may be deemed forward-looking statements.
Words such as "to merge," "to name," "to receive," "will," "may,"
"could," "should," "expect," "expected," "proposed,"
"contemplated," "plan," "project," "intend," "anticipate,"
"believe," "estimate," "predict," "potential," "continue," and
similar expressions are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, CGEI's, CDGC's and Pingtan Fishing's expectations with
respect to the combined company's plans, objectives, expectations
and intentions with respect to future operations; approval and
adoption of business combination by the requisite number of
shareholders; and the timing of the completion of the proposed
business combination. All forward-looking statements involve
significant risks and uncertainties that could cause actual results
to differ materially from those expressed or implied in the
forward-looking statements, many of which are generally outside the
control of CGEI's, CDGC's and Pingtan Fishing's and are difficult
to predict. Examples of such risks and uncertainties include,
but are not limited to: (i) the failure of the business combination
to close for any reason; (ii) general business and economic
conditions; (iii) the performance of financial markets; (iv) risks
relating to the consummation of the contemplated business
combination, including the risk that required shareholder approval
and regulatory agencies might not be obtained in a timely manner or
at all or that other closing conditions are not satisfied; (v) the
impact of the business combination on the markets for the combined
company's products and services; (vi) the employees of CGEI, CDGC
and Pingtan Fishing not being combined and integrated successfully;
(vii) operating costs and business disruption following the
business combination, including adverse effects on employee
retention and on CGEI's, CDGC's and Pingtan Fishing's business
relationships with third parties; (viii) the inability of the
combined company following the closing of the business combination
to meet NASDAQ's listing requirements and the failure of the
combined company's securities to be listed or continue to be listed
on NASDAQ; (ix) the amount of cash available to the combined
company following the business combination being insufficient to
allow CGEI, CDGC, Pingtan Fishing or the combined company to
achieve their business goals; and (xi) the future performance of
the combined company following the closing of the business
combination. Additional factors that could cause actual results to
differ materially from those expressed or implied in the
forward-looking statements can be found in the most recent annual
report on Form 10-K, and the subsequently filed quarterly reports
on Form 10-Q and current reports on Form 8-K filed by CGEI with the
SEC, the most recent annual report on Form 20-F and current reports
on Form 6-K filed by CDGC with the SEC, as well as the proxy
statement when it becomes available. Each of CGEI, CDGC and
Pingtan Fishing anticipates that subsequent events and developments
may cause their views and expectations to change. Neither
CGEI, CDGC nor Pingtan Fishing assumes any obligation, and they
specifically disclaim any intention or obligation, to update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Participants in the Solicitation
CGEI and its directors and officers may be deemed to be
participants in the solicitation of proxies from the shareholders
of CGEI in connection with the proposed business combination.
Information regarding the officers and directors of CGEI is
available in CGEI's annual report on Form 10-K for the year ended
December 31, 2011, which has been
filed with the SEC. Additional information regarding the interests
of such potential participants will also be included in the proxy
statement for the proposed business combination and the other
relevant documents filed with the SEC.
SOURCE China Growth Equity Investment Ltd.