Sino Gas International Holdings, Inc. Announces Signing of $18.8 Million Private Placement Financing
September 10 2007 - 8:00AM
PR Newswire (US)
BEIJING, Sept. 10 /Xinhua-PRNewswire-FirstCall/ -- Sino Gas
International Holdings, Inc. (OTC:SGAS) (BULLETIN BOARD: SGAS)
("Sino Gas", the "Company") and its subsidiary Beijing Zhong Ran
Wei Ye Gas Co., Ltd. ("Beijing Gas") today announced that it
entered into a Securities Purchase Agreement ("SPA") with a group
of institutional investors on September 7, 2007 for the private
placement of the Company's common stock for $18.8 million in gross
proceeds. Pursuant to the SPA, approximately 8.34 million shares of
the Company's common stock were sold in a private sale at $2.25 per
share. In addition, the group of investors will be entitled to
receive 1.5 million additional shares of the Company's common stock
if the Company's after-tax net income for the fiscal year ending
December 31, 2008 is less than $11,000,000; those shares will be
newly issued from treasury at closing and will be placed in escrow
until the end of 2008. The transaction is expected to close on or
about September 10, 2007. In connection with the transaction, the
Company has agreed to issue to the placement agent warrants to
purchase 271,075 shares of common stock exercisable for a period of
three years at an exercise price equal to 110% of the common stock
on the closing date of the transaction and a transaction fee equal
to 6.5% of the gross proceeds of the transaction. As a part of the
financing, Sino Gas has simplified its capital structure by
canceling or repurchasing some of its outstanding warrants from
their holders, who acquired the warrants in financing transactions
in the fall of 2006 (the "prior investors"). As consideration for
the purchase of the Series A, B and D Warrants and the cancellation
of the Series E and J Warrants, Sino Gas will pay to the prior
investors $3.5 million in cash, issue a warrant for the purchase of
271,074 common shares, and issue 770,897 shares of the Company's
Series B preferred stock or stock with substantially identical
terms. In addition, in exchange for the prior investors waiving
their right to receive shares of Series B preferred stock under
anti-dilution provisions of the relevant stock purchase agreements,
the Company has agreed to issue to them 700,000 additional shares
of Series B preferred stock or stock with substantially identical
terms. Under the aforementioned terms, the Company has cancelled
most of its outstanding warrants and clarified its capital
structure without dilution of its equity base. "We are extremely
happy to announce this private financing, which will provide us
sufficient capital in a timely manner to expand our natural gas
distribution networks in more cities and regions in China,"
commented Mr. Yu- chuan Liu, Chairman, CEO and President of Sino
Gas. "Coupled with our solid cash flow from connection fees and gas
sales, this new capital resource enables us to steadily carry out
our strategic acquisition plans on a larger scale. So far this
year, we have added a total of three gas distribution systems in
small-sized cities and we have successfully expanded into the
Northeastern region of China. We plan to add additional
distribution networks mostly in mid-sized cities through
acquisitions and expand into more provinces by the end of 2007."
About Sino Gas International Holdings The Company, through its
indirectly wholly-owned subsidiary, Beijing Zhong Ran Wei Ye Gas
Co., Ltd. ("Beijing Gas") and the subsidiaries of Beijing Gas, is a
leading developer of natural gas distribution systems in small- and
medium-sized cities in China, as well as a distributor of natural
gas to residential, commercial and industrial customers in China.
The Company owns and operates 25 natural gas distribution systems
serving approximately 75,000 residential and six commercial and
industrial customers. Facilities include over 700 kilometers of
pipeline and delivery networks with a daily capacity of
approximately 70,000 cubic meters of natural gas. The Company is
currently constructing four additional natural gas distribution
systems, and two other distribution systems are in the planning
stages. Beijing Gas owns and operates natural gas distribution
systems primarily in Hebei, Jiangsu, Anhui and Shandong Provinces.
For further information, visit the Company's website at
http://www.sino-gas.com/ . Safe Harbor Statement This announcement
contains "forward-looking statements" within the meaning of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. All statements other than statements of historical
fact in this announcement are forward-looking statements, including
but not limited to statements relating to the Company's ability to
raise additional capital to finance the Company's activities; the
effectiveness, profitability, and marketability of its products;
legal and regulatory risks associated with the Company's financing
or corporate structure; the future trading of the common stock of
the Company; the ability of the Company to operate as a public
company; the period of time for which its current liquidity will
enable the Company to fund its operations; general economic and
business conditions; the volatility of the Company's operating
results and financial condition; and other risks detailed in the
company's filings with the Securities and Exchange Commission.
These forward-looking statements involve known and unknown risks
and uncertainties and are based on current expectations,
assumptions, estimates and projections about the Company and the
natural gas industry in China. Although the Company believes that
the expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that its expectations will turn
out to be correct, and investors are cautioned that actual results
may differ materially from the anticipated results. All information
in this release is as of September 10, 2007. The Company undertakes
no duty to update any forward-looking statements to conform the
release to actual results or changes in its circumstances or
expectations after the date of this release. For more information,
please contact: Sino Gas International Holdings, Inc. Ms. Fang
Chen, Chief Financial Officer Tel: +86-10-8260-0527 Email: CCG
Elite Investor Relations Crocker Coulson, President Tel:
+1-646-213-1915/1914 (New York) Email: DATASOURCE: Sino Gas
International Holdings, Inc. CONTACT: Ms. Fang Chen, Chief
Financial Officer of Sino Gas International Holdings, Inc.,
+86-10-8260-0527, or ; or Crocker Coulson, President of CCG Elite
Investor Relations, +1-646-213- 1915/1914 (New York), or , for Sino
Gas International Holdings, Inc. Web Site: http://www.sino-gas.com/
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