Yalian Steel Corporation

June 08, 2009 08:00 ET

Yalian Steel Corporation Announces $8.5 Million Bought Deal Private Placement Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 8, 2009) -


Yalian Steel Corporation (TSX VENTURE:YL) ("Yalian" or the "Company") is pleased to announce that it has entered into an agreement with GMP Securities L.P. (the "Underwriter"), which has agreed to purchase 5,000,000 common shares of the Company (the "Common Shares') at a price of $1.70 per Common Share to raise gross proceeds of $8.5 million, on a "bought deal" underwritten private placement basis (the "Offering"). A cash commission equal to 6% of the gross proceeds of the Offering will be paid to the Underwriter. As additional compensation, the Company will grant the Underwriter broker warrants (the "Broker Warrants") entitling the Underwriter to acquire that number of Common Shares as is equal to 6% of the number of Common Shares issued pursuant to the Offering exercisable for 18 months following the closing date of the Offering.

Both the Common Shares and the Common Shares underlying the Broker Warrants issued pursuant to the Offering are subject to a four-month hold period from the date of closing.

The Common Shares to be sold under this Offering will be offered on a private placement basis to Canadian residents who are accredited investors under applicable securities laws, and in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended.

The closing date of the Offering is expected to be on or around June 19, 2009 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange and any other applicable securities regulatory authorities. The proceeds from the sale of the Common Shares will be used for working capital and general and corporate purposes.

About Yalian Steel Corporation

Yalian Steel Corporation is a British Columbia corporation focused on the production of high quality Longitudinally Submerged Arc Welded (LSAW) steel pipe to service Asia's rapidly growing energy transportation infrastructure market. The Company is currently completing construction of its initial manufacturing facility in city of Yangzhou, in the Jiangsu province of China. Completion of the first production line, with a capacity of 200,000 tonnes per year, is scheduled for the fall of 2009. The Yangzhou Yalian plant will utilize the JCOE (J-ing, C-ing, O-ing, Expanding) process, an advanced method of LSAW pipe production that involves the bending and shaping of X80 grade steel. The process is well established worldwide, but relatively new in the China market.

Not for distribution to United States newswire services or for dissemination in the United States.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

Contact Information

    Hong (Iris) Duan
    Chief Financial Officer
    (604) 696-6388