Hanfeng Evergreen Inc.

Hanfeng Evergreen Inc.

July 04, 2013 08:07 ET

Hanfeng Evergreen Provides Update on Proposed Privatization Transaction

TORONTO, ONTARIO--(Marketwired - July 4, 2013) - Hanfeng Evergreen Inc. (TSX:HF) ("Hanfeng" or the "Corporation") today provided an update regarding the current status of the pending privatization of the Corporation by Xinduo Yu, the Chief Executive Officer of the Corporation, and 8310831 Canada Inc., a corporation wholly-owned by Xinduo Yu (collectively, the "Purchaser"), which was previously approved by the Corporation's shareholders at an annual and special meeting of the Corporation's shareholders held on March 15, 2013.

Since the board of directors of the Corporation unanimously approved the proposed privatization (without the participation of Mr. Yu), and which approval followed the unanimous recommendation of a special committee of independent directors (the "Special Committee"), the Corporation has agreed to two extensions on March 14, 2013 and May 3, 2013, respectively, for the purpose of providing the Purchaser with further time to arrange the required financing to complete the proposed privatization. As previously disclosed, the arrangement agreement entered into by the Corporation and the Purchaser on February 11, 2013 in furtherance of the proposed privatization has been amended to enable these extensions to occur without in any way compromising or affecting the rights of the Corporation and the obligations of the Purchaser. In this regard, the basic terms of the arrangement, under which the Purchaser has agreed to acquire all of the outstanding common shares of the Corporation not already owned by the Purchaser for cash consideration of CDN$2.25 per share, otherwise remain unchanged. The current terms of the arrangement agreement, as amended, contemplate an outside closing date of July 3, 2013. Notwithstanding the terms of the arrangement agreement, the transaction cannot be consummated at this time.

The Corporation has now been advised by the Purchaser that the requisite funding arrangements (comprising CDN$85 million of debt financing committed by Nongken Longgang Agriculture Investment Co., Limited and the balance of the requisite funding, comprising approximately CDN$25 million, directly from Xinduo Yu) have been put in place to consummate the proposed privatization transaction. However, those arrangements would require certain amendments to be made to the plan of arrangement, which contemplate the direct payment by the Purchaser of the Chinese currency equivalent of CDN$2.25 in cash per share payable under the arrangement to all registered shareholders of the Corporation resident in China. In all other respects, the basic terms of the arrangement would remain unchanged.

The Special Committee is in the ongoing process of reviewing and considering the new funding proposal presented to it by the Purchaser as well as the proposed amendments to the plan of arrangement required to give effect to this funding proposal, and is in discussions with the Purchaser and its advisors regarding the certainty of the commitments for this funding proposal and the steps required to implement the proposed amendments to the plan of arrangement.

Hanfeng does not intend to make any further comment unless or until there is material information to announce.

Forward-Looking Information

This press release contains forward-looking statements based on current expectations, including but not limited to Hanfeng's plans, objectives and expectations, the Purchaser's plans, objectives and expectations with respect to Hanfeng and its business, statements regarding the completion and the timing of the completion of the proposed privatization transaction. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about Hanfeng's business are more fully discussed in the Corporation's disclosure materials, including its annual information form and MD&A, filed with the securities regulatory authorities in Canada. Additional important factors that could cause actual results to differ materially include, but are not limited to: the actual closing of the proposed transaction; the timing for closing the proposed transaction; the satisfaction or non-satisfaction as applicable of one or more conditions to the closing of the proposed transaction; and delay of, or inability to receive approval of the Ontario Superior Court of Justice. With respect to the forward-looking statements and information concerning the anticipated impact and completion of the proposed transaction and the anticipated timing for completion of the proposed transaction, the Purchaser and Hanfeng have provided such statements and information in reliance on certain assumptions that they believe are reasonable at this time, including assumptions as to the ability of the parties to receive, in a timely manner, the necessary Ontario Superior Court of Justice approval, the ability of the Purchaser to obtain all necessary financing to compete the proposed transaction, and the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the proposed transaction. Readers are cautioned that the foregoing list of important factors and assumptions is not exhaustive. Forward-looking statements are not guarantees of future performance.

In light of the significant uncertainties inherent in the forward-looking information included herein, any such forward-looking information should not be regarded as representations by either the Purchaser or Hanfeng that its respective objectives or plans will be achieved. Investors are cautioned not to place undue reliance on any forward-looking information contained herein. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. In addition, these forward-looking statements relate to the date on which they are made. Hanfeng disclaims any intention or obligation to update or revise any forward-looking statements or the foregoing list of factors, whether as a result of new information, future events or otherwise, except to the extent required by law.

About Hanfeng Evergreen Inc.

Hanfeng is a leading producer and supplier of value-added fertilizer solutions in emerging markets. It is the largest producer of slow and controlled release fertilizer in two of world's most significant agricultural markets: the People's Republic of China ("China") and the Republic of Indonesia. As the first company to introduce slow and controlled release fertilizers into China's agriculture market, Hanfeng has established itself both as a market leader and innovator. A Canadian company, Hanfeng is headquartered in Toronto, Ontario and its shares trade on the Toronto Stock Exchange under the ticker HF.

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