China Wind Power International Corp.
TSX VENTURE : CNW

China Wind Power International Corp.

July 29, 2016 11:07 ET

China Wind Power Announces Proposed Sale of All or Substantially All of Its Assets and Dissolution

TORONTO, ONTARIO--(Marketwired - July 29, 2016) - China Wind Power International Corp. (the "Company") (TSX VENTURE:CNW) announces that it has entered into an arrangement agreement (the "Arrangement Agreement") with Ruihao Trust ("Ruihao"), a major shareholder of the Company, pursuant to which it is proposed that the Company will sell all or substantially all of its assets to Ruihao for $12,310,000 (the "Purchase Price") by way of a plan of arrangement (the "Arrangement") under the Business Corporations Act (Ontario) (the "OBCA").

Purchase Price

The Purchase Price will be satisfied in full by Ruihao by assuming certain liabilities in the amount of $3,728,104.18, and by payment of $2,858,799.08 in cash and $5,723,096.74 as an interest bearing promissory note (the "Promissory Note"). After payment of any remaining liabilities, the remaining balance of the Purchase Price (the "Reduction of Capital Amount") will then be distributed to shareholders of the Company (the "Shareholders") by way of a return of capital allocated to the common shares of the Company (the "Common Shares") through the distribution of the Promissory Note to Ruihao and the distribution of cash to all other Shareholders.

Shareholder Approval

In order to become effective, the Arrangement must be approved by two-thirds of the Shareholders. In addition, Ruihao holds 43,569,561 Common Shares, representing approximately 68.19% of the total issued and outstanding Common Shares as of today's date. As a result, Ruihao is a related party to the Company, as such term is defined in Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions ("MI 61-101") and the Arrangement will also be conditional upon the approval of a simple majority of the Shareholders, excluding Ruihao and any Related Parties (as defined in MI 61-101) or Joint Actors (as defined in MI 61-101).

Upon completion of the Arrangement, it is expected that the Company will voluntarily dissolve (the "Dissolution") pursuant to Section 237(a) of the OBCA. In order to become effective, the Dissolution must be approved by two-thirds of the Shareholders.

Shareholder Meeting

It is expected that a special meeting of Shareholders to approve the Arrangement and the Dissolution will be held in October 2016 (the "Meeting"). The Arrangement is also conditional upon customary terms for transactions of this nature including the approval of the Ontario Superior Court of Justice (Commercial List) (the "Court").

Timing

Further particulars of the Meeting, the Arrangement, the Dissolution and the Arrangement Agreement will be included in the information circular for the Meeting that is expected to be mailed to the Shareholders in September 2016. If all approvals are obtained and other conditions met, it is expected that the Arrangement will be completed by October 2016.

Special Committee & Board of Director's Approval

The Board of Directors of the Company (the "Board") formed a special committee consisting of an independent director of the Company (the "Special Committee") to consider the Arrangement and the Arrangement Agreement. The Special Committee has determined that the completion of the Arrangement is in the best interest of the Company, based in part on the following:

  • Receipt of a valuation (the "Valuation") and fairness opinion (the "Fairness Opinion") from Valuation Support Partners Ltd. ("VSPL"). The Valuation and the Fairness Opinion together conclude that, subject to the limitations, qualifications and assumptions set forth in each of the Valuation and the Fairness Opinion, the fair market value of the Company's assets was in the range of $5,320,000 to $19,300,000, representing a value of $0.08 to $0.30 per Common Share, and the Reduction of Capital Amount representing $0.1314 per Common Share to be paid to Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Shareholders (other than Ruihao).

  • The Arrangement provides Shareholders with liquidity through a cash payment to all Shareholders, other than Ruihao, notwithstanding that the Company's Common Shares have been delisted from the TSX Venture Exchange.

  • The Arrangement is subject to Shareholder approval of a special resolution, the granting of the final order from the Court, and customary closing conditions.

  • The Arrangement Agreement is the result of a negotiation process between the Company and Ruihao. Under the Arrangement Agreement, the Board can fulfill its fiduciary duties by considering and approving or recommending an unsolicited bona fide written acquisition proposal by an arm's length third party, subject to certain conditions as further described in the Arrangement Agreement. No break fee or termination fee is payable by either the Company or Ruihao in the event the Arrangement Agreement is terminated.

The Special Committee has recommended that the Board approve the Arrangement.

After taking into consideration, among other things, the recommendation of the Special Committee, the Valuation of VSPL as to the value of the Corporation's assets and the conclusion of the Fairness Opinion as to the fairness, from a financial point of view, of the Reduction of Capital Amount to the Shareholders, the Board has concluded that the Arrangement is in the best interests of the Company and unanimously recommends that the Shareholders vote in favour of the Arrangement.

Additionally, the Board has determined that it is in the best interests of the Company to voluntarily dissolve the Company following the completion of the Arrangement and recommends that the Shareholders vote in favour of the Dissolution.

Advisor

VSPL is acting as financial advisor to the Company. A copy of the Valuation and the Fairness Opinion will be included in the information circular to be provided to the Shareholders prior to the Meeting.

Forward-Looking Statement Disclaimer

Certain statements that are not historical facts made in this press release may be "forward-looking statements" within the meaning of applicable Canadian securities legislation (forward-looking information and forward-looking statements being collectively herein after referred to as "forward-looking statements") and are subject to risks and uncertainties. Statements containing words such as "will", "could", "expect", "may", "anticipate", "believe", "intend", "estimate", "plan" and other similar expressions are forward-looking statements that represent management's beliefs at the time the statements are made and are based on certain factors and assumptions. Such forward-looking statements may include, without limitation, statements regarding the date of the Meeting, the timing of the mailing of the information circular for the Meeting, the closing of the Arrangement, the completion of the Dissolution, the expected benefits of the Arrangement to Shareholders and receipt of the necessary Shareholder and regulatory approvals.

These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events to differ materially from those projected in forward-looking statements. Important factors that could cause actual results to differ materially from the Company's expectations include uncertainties involving the closing of the Arrangement, the completion of the Dissolution, the expected benefits of the Arrangement to the Shareholders, and receipt of the necessary Shareholder and regulatory approvals and other risks and uncertainties as more fully described in the Company's regulatory filings with the securities regulatory authorities, which are available under the Company's profile at www.sedar.com. Readers are cautioned that the foregoing lists of risks, uncertainties, assumptions and other actors are not exhaustive; therefore, readers should not place undue reliance on the forward-looking statements contained herein. Except as required by applicable securities laws, the Company undertakes no obligation to update any forward looking statement to reflect events or circumstances after the date on which such statement is made.

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