Issue of Redemption Notice to IGO


 

TIDMYCI 
 
RNS Number : 0493O 
Yangtze China Investment Limited 
02 March 2009 
 

 
 
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| Press Release                      |                       2 March 2009 | 
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Yangtze China Investment Limited 
 
 
("Yangtze" or "the Company") 
 
 
Issue of redemption notice to IGO and subsequent 
redemption of outstanding convertible loan notes 
 
 
 
 
Yangtze China Investment Limited (AIM:YCI.L), a provider of expansion capital to 
China-based enterprises, announces today that it has issued a redemption notice 
to IGO Home Shopping Holdings Limited ("IGO") to redeem US$5 million of 
convertible loan notes ("CLNs") in favour of Ace Aim Investments Limited ("AA"), 
following the 100% write-down by Yangtze of the investment in IGO as announced 
in the Company's Interim Results on 19 December 2008 ("Interim Results"). 
 
 
Yangtze has issued the redemption notice via AA, a wholly owned subsidiary of 
Excellent Rise Investments Limited ("ER") that subscribed for the CLNs. The 
Company acquired the 100% equity interest in AA from ER upon the flotation of 
Yangtze on AIM on 14 May 2008. At the time of the acquisition, AA had subscribed 
for the IGO US$5 million of CLNs, which, upon full conversion, would represent 
an equity interest for AA of 20% in IGO. 
 
 
Subsequent to the write-down (equivalent to approximately US$5 million), Yangtze 
sought independent legal advice which stated that an event of default (under the 
terms of the Amended and Restated Convertible Note Instrument dated 10 March 
2008 ["Note Instrument"] governing the CLNs) is considered to have occurred if 
any member of the group of IGO ("IGO Group", including IGO, its subsidiary 
and/or its related domestic entity in PRC ["Shanghai IGO"]) is unable to pay its 
debts up to an aggregate amount of US$50,000 as and when they fall due.  On the 
understanding that Shanghai IGO is unable to pay debts up to such amount, based 
on various email exchanges between service providers of Yangtze and IGO and the 
latest financial accounts of IGO Group, the legal opinion stated that an event 
of default under the Note Instrument has occurred which now entitles AA to 
require the redemption of the CLNs by IGO. 
 
 
At a Board meeting held on 26 February 2009 the Directors of Yangtze authorised 
AA to exercise the right of redemption of the CLNs and to issue a redemption 
notice to IGO. The service of the redemption notice on IGO has been performed 
today, with IGO required to complete the redemption on 31 March 2009. 
 
 
Wilfred Wong, Chairman of Yangtze China Investment Limited, said: "We have 
formulated each of our investment structures in a reasonable manner and have 
actively sought to protect the interests of our shareholders.  Yangtze obtained 
legal advice and subsequently exercised the right of redemption for the purpose 
of minimising the loss in our investment portfolio as soon as we knew that an 
event of default under the Note Instrument had occurred." 
 
 
 
 
- Ends - 
 
 
For further information: 
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| Yangtze Capital Advisory  Limited         |                            | 
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| Richard Zhao                              |        Tel: +852 2281 7218 | 
| Steven Feng                               |        Tel: +852 2281 7223 | 
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|                                           |          www.yangtzecn.com | 
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| Collins Stewart Europe Limited            |                            | 
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| Adrian Hadden                             |  Tel: +44 (0) 20 7523 8350 | 
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|                                           |     www.collinsstewart.com | 
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Media enquiries: 
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| Abchurch Communications Limited           |                            | 
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| Henry Harrison-Topham / Chris Lane        |  Tel: +44 (0) 20 7398 7708 | 
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| chris.lane@abchurch-group.com             |    www.abchurch-group.com  | 
+-------------------------------------------+----------------------------+ 
 
 
 
 
  Notes to Editors 
 
 
Yangtze China Investment Limited is a closed-ended investment company 
established to make minority equity and equity-related investments in a 
portfolio of small and medium-sized growth businesses within, or associated 
with, the consumer sector in China.  With a proprietary deal flow, the Group 
focuses on unlisted companies whose business operations are based principally in 
mainland China.  Yangtze will typically seek to invest in companies that are 
revenue generating, ideally profitable or anticipated to generate profits in the 
near term and which the Group believes have strong management teams and market 
leading potential. 
 
 
Yangtze aims to capitalise on the growing disposable income in China, investing 
primarily in companies operating in a variety of consumer sectors, including 
consumer related technology, media and advertising, entertainment, distribution 
and retailing of consumer goods and services, and health goods and services. 
 
 
The Chinese economy has experienced a 9.97% average GDP growth over the past 14 
years and recorded GDP growth of 11.4% in 2007.    Government reforms are 
transforming the economy, with a focus on domestic consumption, infrastructure 
spending and, now increasingly, upon environmental issues. 
 
 
For further information, please see www.yangtzecn.com 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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