CDC says amendment eliminates put option for 3.75% convertibles

By Angela McDaniels

Tacoma, Wash., Nov. 12 - CDC Corp. believes the redemption right given to holders of its 3.75% senior exchangeable convertible notes due 2011 is no longer exercisable following an amendment made to the convertibles, according to a 6-K filed with the Securities and Exchange Commission by CDC Software Corp.

The notes and the note purchase agreement were amended to change the definition of qualified initial public offering to provide that CDC Software, CDC Games or any of their respective subsidiaries can consummate a qualified IPO and to reduce the amount of proceeds needed to achieve a qualified IPO to $40 million from $100 million.

Under the original terms of the convertibles, if there is an IPO for at least $100 million of either CDC Software or CDC Games then the notes become exchangeable into that company's common shares at a price linked to the IPO price, with a discount that increases over time.

CDC Software went public with a $57.6 million IPO in August. The IPO price was $12 per American Depositary Share.

CDC Delaware Corp., the holder of $124.78 million principal amount, or 74.7%, of the convertibles, made the amendment on Nov. 11.

As reported in April 2009, the company offered a $175,000 cash bonus to chief executive officer Peter Yip if the Nov. 10, 2009 put option could be avoided or eliminated.

CDC is a Hong Kong-based provider of enterprise software, online games and internet and media services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.