Proceeds slated to finance acquisition of interests in two companies
By Devika Patel
Knoxville, Tenn., Sept. 20 - China New Energy Group Co. sold $15 million of its series C and series D convertible preferred stock in a private placement with China Hand Fund I, LLC on Sept. 14, according to an 8-K filed Monday with the Securities and Exchange Commission.
The company sold 18.73 series C preferreds and four series D preferreds.
The company also sold $3 million of convertible notes due Oct. 15, 2010 to a group of investors. The notes pay no interest and are convertible into a total of 1.67 series C preferreds if they are repaid before maturity. Otherwise, they will convert automatically into a total of 37.5 series C preferreds.
The series C preferreds are convertible into 5,647,011 common shares at $0.14179 per share, a discount of 29.11% to the closing share price of $0.20 on Sept. 13.
The series D preferreds are convertible into a number of shares determined by a formula that includes several variables, including the number of shares into which the series C preferreds may be converted and the number of shares issued to new investors between Oct. 1 and April 30, 2011 in sales that do not exceed $54.5 million.
Both series of preferreds will convert automatically on May 31 or the date when the company completes its planned acquisition of 70% of the equity interests in Beijing Century Dadi Gas Engineering Co., Ltd., whichever occurs later.
Proceeds will be used to finance the acquisition of a 70% equity interest in each of Beijing Century and Zhoulu Dadi Gas Co. Ltd.
China New Energy is a natural gas company based in Tianjin, China.
| Issuer: | China New Energy Group Co.
|
| Issue: | Series C convertible preferred stock, series D convertible preferred stock, convertible notes
|
| Amount: | $18 million
|
| Warrants: | No
|
| Investor: | China Hand Fund I, LLC (for $15 million preferreds)
|
| Settlement date: | Sept. 14
|
| Stock symbol: | OTCBB: CNER
|
| Stock price: | $0.20 at close Sept. 13
|
| Market capitalization: | $27.73 million
|
|
|
| Series C preferreds
|
| Shares: | 18.73
|
| Conversion price: | $0.14179
|
| Conversion ratio: | Into 5,647,011 shares
|
|
|
| Series D preferreds
|
| Shares: | Four
|
|
|
| Notes
|
| Amount: | $3 million
|
| Maturity: | Oct. 15, 2010
|
| Coupon: | None
|
| Conversion ratio: | 1.67 series C preferreds if repaid prior to maturity; otherwise, 37.5 series C preferreds
|
© 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.
