China's Sinoenergy says conversion price on 3% notes cut to $4.20

By Susanna Moon

Chicago, April 3 - Sinoenergy Corp. said the conversion price was reduced to $4.20 per share, effective March 28, for its $14 million of 3% guaranteed senior convertible notes due 2012.

Prior to the adjustment, the conversion price was $5.125 per share.

The notes provide for an adjustment in the conversion price of the notes based on the market price of the company's common stock on Sept. 28 and March 28 of each year, provided that the conversion price is not reduced to less than $4.20 per share.

As a result, the company will incur a $3.86 million non-cash expense, which will be amortized on a quarterly basis over the 15 quarters remaining during the term of the note, beginning with the quarter that ended March 31, with any unamortized amount being recognized upon conversion or prepayment of the notes.

Sinoenergy said it incurred about $250,000 of non-cash obligation associated with the convertibles due 2012 for the second quarter that ended on March 31.

The amortization of these expenses will increase non-cash loss of $250,000 to the previously announced estimated loss for the quarter that ended March 31.

The company issued the notes to Abax Lotus Ltd. and CCIF Petrol Ltd. in a private placement on Sept. 28, 2007.

Based in Qingdao, China, Sinoenergy manufactures compressed natural gas vehicle and gas-station equipment and builds compressed natural gas stations in China.

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