By Sheri Kasprzak
New York, Dec. 14 - Xinhua China Ltd. said it concluded the first tranche of a $4 million private placement.
The company issued a $1.25 million secured convertible debenture to Highgate House Funds, Ltd.
The 2% debenture matures in five years and is convertible into shares at the lesser of $3.50 or the average of the three lowest closing bid prices during the 40 trading days before conversion.
The debentures are redeemable at any time at 135% of the face value plus interest.
Highgate also received warrants for 1,035,000 shares, exercisable at $3.50 each through Nov. 22, 2010.
Another $2 million of the debentures will be issued once the company files a registration statement with the Securities and Exchange Commission and the remainder will be funded once the statement is declared effective.
Proceeds will be used for general corporate purposes.
Based in Beijing, Xinhua China distributes books and periodicals in China.
| Issuer: | Xinhua China Ltd.
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| Issue: | Secured convertible debenture
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| Amount: | $4 million (first tranche $1.25 million)
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| Maturity: | Five years
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| Coupon: | 2%
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| Price: | Par
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| Yield: | 2%
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| Conversion price: | The lesser of $3.50 or the average of the three lowest closing bid prices during the 40 trading days before conversion
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| Call: | Redeemable at 135% of face value plus interest
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| Warrants: | For 1,035,000 shares (in the first tranche)
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| Warrant expiration: | Nov. 22, 2010
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| Warrant strike price: | $3.50
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| Investor: | Highgate House Funds, Ltd.
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| Settlement date: | Dec. 14 (for first tranche of $1.25 million)
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| Stock price: | $3.50 at close Dec. 14
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