TORONTO, ONTARIO--(Marketwired - Jan. 12, 2017) - China Investment Corporation issues the following press release in accordance with Canadian Securities Administrators' National Investment 62-103:
1. The designation and securities to which this report relates and the name and address of the head office of the issuer of the securities.
Common shares of the capital of SouthGobi Resources Ltd. ("SouthGobi"), whose head office is located at 1100 - 355 Burrard Street, Vancouver, British Columbia, Canada, V6C 2G8.
2. The name of the market in which the transaction or other occurrence that triggered the requirement to file this report took place.
Not applicable. New shares were issued by SouthGobi in satisfaction of the paid in kind component of the interest accrued on the Debenture (as defined below).
3. The name and address of the acquiror.
China Investment Corporation, by its indirectly wholly-owned subsidiary Land Breeze II S.à r.l. ("LB")
c/o China Investment Corporation
16F-19F, New Poly Plaza
No. 1 Chaoyangmen Beidajie
4. The date of the transaction or other occurrence that triggered the requirement to file this report.
China Investment Corporation previously filed early warning reports in respect to a US$500 million convertible debenture (the "Debenture") LB purchased from SouthGobi and in respect to the exercise on March 29, 2010 of SouthGobi's right to call for the conversion of up to US$250 million of the Debenture, in respect to the receiving of paid in kind interest on November 21, 2013, and in respect of the receiving of paid in kind interest on November 21, 2014, and in respect of the receiving of paid in kind interest on November 27, 2015. China Investment Corporation is a sovereign wealth fund of the People's Republic of China.
Pursuant to the Debenture, since March 29, 2010, LB has acquired ownership of 40,123,980 common shares of SouthGobi, which includes 25,232,419 common shares previously issued and reported upon and 14,891,561 common shares issued on January 11, 2017, in each case, in satisfaction of the paid in kind component of the interest accrued on the Debenture.
5. The designation and number or principal amount of securities acquired or disposed of that triggered the requirement to file this report and the change in the acquiror's securityholding percentage in the class of securities.
See item 2.2 above.
6. The acquiror acquired or disposed ownership of, or acquired or ceased to have control over the securities that triggered the requirement to file the report.
See item 2.2 above.
7. The designation and number or principal amount of securities and the acquiror's securityholding percentage in the class of securities, immediately before and after the transaction or other occurrence that triggered the requirement to file this report.
Immediately prior to the issuances noted in item 2.2 above, LB held 49,875,030 Shares representing approximately 19.35% of the Issued Shares.
After giving effect to the issuances noted in item 2.2 above, LB owns and controls 64,766,591 common shares of SouthGobi, representing approximately 23.76% of the issued and outstanding common shares of SouthGobi as of January 11, 2017. LB also continues to own US$250 million of principal amount under the Debenture which, if converted at the current conversion price of Cdn$8.88 (and the currency exchange rate of 0.7397) would represent approximately 38.1 million additional common shares. If the Debenture in the principal amount of US$250 million that remains outstanding after the issuances noted in item 2 above is fully converted into SouthGobi common shares at the current conversion price of Cdn$8.88 and the currency exchange rate of 0.7397 then, together with the actual common shares owned or controlled by LB as of the date hereof, LB would own or control a total of approximately 102.9 million common shares or approximately 37.75% of the common shares of SouthGobi.
8. The value, in Canadian dollars, of any consideration paid or received per security and in total.
The amount of interest in respect of the 14,891,561common shares issued on January 11, 2017 was US$ 4 million, and the price of the common shares was Cdn$ 0.36 per share.
9. The purpose or purposes of the acquiror and any joint actors for the acquisition or disposition of securities of the reporting issuer. Describe any plans or future intentions which the acquiror and any joint actors may have which relate to or would result in any of the following:
(a) the acquisition of additional securities of the reporting issuer, or the disposition of
securities of the reporting issuer;
(b) a corporate transaction, such as a merger, reorganization or liquidation, involving the
reporting issuer or any of its subsidiaries;
(c) a sale or transfer of a material amount of the assets of the reporting issuer or any of its
(d) a change in the board of directors or management of the reporting issuer, including any
plans or intentions to change the number or term of directors or to fill any existing vacancy
on the board;
(e) a material change in the present capitalization or dividend policy of the reporting issuer;
(f) a material change in the reporting issuer's business or corporate structure;
(g) a change in the reporting issuer's charter, bylaws or similar instruments or another action
which might impede the acquisition of control of the reporting issuer by any person or
(h) a class of securities of the reporting issuer being delisted from, or ceasing to be
authorized to be quoted on, a marketplace;
(i) the issuer ceasing to be a reporting issuer in any jurisdiction of Canada;
(j) a solicitation of proxies from securityholders;
(k) an action similar to any of those enumerated above.
LB holds SouthGobi's common shares and the Debenture for investment purposes. LB has rights under the Debenture to convert the remaining US$250 million principal amount under the Debenture into common shares of SouthGobi. Subject to applicable regulatory and contractual restrictions, LB may from time to time dispose of or acquire additional securities of SouthGobi. Further common shares may be acquired as payment in kind of interest due on the Debentures. Other than the foregoing, LB has no current intention to undertake any of the activities identified in (a) to (k) although it may discuss some or all of those activities with management or the Board from time to time should SouthGobi not be able to comply with the terms of the Debenture or deferral of interest arrangements between LB and SouthGobi.
10. The acquiror relies on an exemption from requirements in securities legislation applicable to formal bids for the transaction, state the exemption being relied on and describe the facts supporting that reliance.
A copy of the amended early warning report to which this press release relates has been filed on www.sedar.com under SouthGobi's issuer profile.
China Investment Corporation
16F-19F, New Poly Plaza
No. 1 Chaoyangmen Beidajie