CDC buys back some 3.75% exchangeables at discount

By Susanna Moon

Chicago, Jan. 2 - CDC Corp. said an affiliate of the company repurchased some of its $168 million 3.75% senior exchangeable convertible notes due 2011 from several noteholders at less than par on Dec. 31.

As noted on Dec. 29, the company will pay about 76 for the notes, in line with a third-party independent consultant's assessment of the fair value of the notes.

The company said it plans to continue to pursue possible early purchases or redemptions with remaining noteholders.

"We are very pleased with the ongoing progress that we are making to reduce debt by closing agreements with certain noteholders for the purchase of their holdings at a price below par value," Peter Yip, chief executive officer of CDC, said in a news release.

"By leveraging our cash on hand for the negotiated purchases, we feel this strategy will not only help to decrease our debt, but also help further strengthen our financial condition and prospects. We also feel these negotiated purchases of notes below par value are fair for both parties in light of current overall economic conditions," Yip said.

The company issued the notes in 2006 to 12 institutional investors led by Evolution Capital Management LLC. If there is an initial public offering of at least $100 million for either CDC Software or CDC Games, then the notes become exchangeable into that company's common shares.

CDC is a Hong Kong-based provider of enterprise software, online games and internet and media services. It announced the possibility of a partial repurchase on Sept. 24.

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