IND Indy Diarytech Limited Com

VANCOUVER, Aug. 16 /CNW/ -- VANCOUVER, Aug. 16 /CNW/ - IND DairyTech Limited ("IND" or "the Company") (TSXV:IND) today announced that it has entered into an agreement with China Construction Bank International (Tianjin) Co., Ltd. ("CCB International") and SAIF III Mauritius (China Investment) Limited ("SAIF"), also referred to as "the Investors". CCB International will invest RMB 77 million (CAD $11.9 million) in cash and SAIF will invest RMB 28.95 million (CAD $4.5 million) in cash to subscribe for 20 million shares and 7.52 million shares of the IND Lifetech (China) Co., Ltd. ("IND China"), respectively. IND China is an indirect subsidiary of the Company, which is currently held as to 94.19% by the Company through its wholly owned subsidiary IND Lifetech Group Ltd ("IND Lifetech"). Following the capital increase, the Company, CCB International and SAIF will respectively hold approximately 76.67%, 13.52% and 5.08% of IND China. Shanghai KP Technology Investment Development LLC ("Shanghai KP") will hold approximately 1.35% of IND China and Jiangsu Etern Group Ltd. will hold approximately 3.38% of IND China. In connection with the capital increase, IND Lifetech has also entered into a Performance Undertaking Agreement with the Investors, Ai De Diagnostic Co., Ltd. ("Ai De") and Jiabei (Jesse) Zhu, a control person of both the Issuer and Ai De. Pursuant to the Performance Undertaking, IND Lifetech has guaranteed a minimum annual net profit of RMB 50 million for 2010 for IND China. IND Lifetech and Shanghai KP have agreed to compensate the investors on a pro rata basis in accordance with their interest in IND China if such annual net profit targets are not met. If the annual net profit target for 2010 is not met, the Company and Shanghai KP have agreed to transfer up to 8.26 million shares of IND China to the Investors. In addition, if: a) by October 20, 2010, the Company has not started the application to TSXV regarding IND China's listing plan in China or the application has been denied; or b) IND China is not listed on a stock exchange in China by December 31, 2013 or the Chinese Securities Regulatory Commission denies IND China's application for a stock exchange listing prior to such date; or c) IND China does not achieve the guaranteed annual net profit for 2010 and does not achieve 30% annual net profit growth in 2011; or d) IND China does not disclose to the Investors material information relating to IND China's operations, the Investors may require IND Lifetech and Shanghai KP to buy back all their IND China shares at a price equal to the original acquisition price plus 15% interest per annum compounded annually less any dividends received. Mr. Zhu and Ai De have agreed to guarantee the obligations of IND Lifetech and Shanghai KP under the Performance Guarantee or otherwise compensate Investors accordingly. The completion of the capital increase is subject to approvals from Chinese regulatory organizations and TSXV. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. FORWARD LOOKING INFORMATION This news release contains forward-looking statements and information that are based on the beliefs of management and reflect IND's current expectations. Such statements and information reflect the current view of IND with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking information in this news release includes revenue expected from cow sales, the development and increases in herd size in China, the purchase of Chinese Holstein cows (including cost savings expected to result from the investment made in purchasing these cows), the use of Canadian Holstein embryos to impregnate surrogate cows, the establishment of large scale North American-style farming operations in China, the size of IND as a Canadian Holstein dairy company in China, and the aim of becoming a leading provider of high quality raw milk to the Chinese dairy industry. There are a number of important factors that could cause IND's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others, risks related to IND's business such as failure of the business strategy and limited operating history, reliance on farm development partners, disruptions due to bovine diseases, dependence on biotechnology, reduction in government support and access to raw materials; risks related to IND's operations, such as additional financing requirements and access to capital, the ability to repay debt, reliance on key personnel, fluctuation in feedstock costs, fluctuations in costs of production, product spoilage and liability, loss of embryo inventory, factors related to milk production, fluctuations in milk prices, fluctuations in milk demand, lack of specificity in certain agreements, litigation, indemnities, insurance, competition, intellectual property and variations in cow lactation periods; risks related to IND and its business generally such as potential exposure to tax under Canadian tax, regulations of the Peoples' Republic of China (the "PRC") relating to offshore special purpose companies, recent PRC regulations relating to cross-border mergers and acquisitions, environmental protection, currency exchange rates and conflicts of interest; and risks related to doing business in the PRC such as tax, repatriation of profit and currency conversion, acquisition and appropriation of land use rights, foreign investment, permits and business licences, employment contracts, government intervention, shareholders' rights and enforcement of judgments and a developing legal system. IND cautions that the foregoing list of material factors is not exhaustive. When relying on IND's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. IND has assumed a certain progression of its business, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. For additional information with respect to certain of these and other factors, refer to the risk factors section of IND's Management's Discussion & Analysis dated April 28, 2010 available on SEDAR at www.sedar.com. The forward-looking information contained in this news release represents the expectations of IND as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While IND may elect to, it does not undertake to update this information at any particular time except as required in accordance with applicable securities legislation. Jesse Zhu, Chief Executive Officer, IND DairyTech Limited, 604-522-1619, jessezhu@ind.ca; James Xiang, VP Corporate Finance, IND DairyTech Limited, 416-886-1261, james.xiang@ind.ca; Bill Mitoulas, Investor Relations, Stone Communications Service Limited, 800-336-9528, scs@stoneco.com

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