Starr International to Purchase 1M China MediaExpress (CCME) Convertible Preferred Shares for $30M

January 13, 2010 9:06 AM EST Send to a Friend
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China MediaExpress Holdings, Inc. (AMEX: CCME) and Starr International Company, Inc. today announced a definitive agreement for Starr International to make a significant investment in CME. Under the terms of the agreement, Starr International will purchase, in a $30 million private placement, 1,000,000 newly issued shares of CME Series A Convertible Preferred Stock at $30.00 per share, together with 1,545,455 of CME common stock purchase warrants. CME intends to use the net proceeds of this financing for working capital purposes including internal expansion initiatives and potential mergers and acquisitions.

Zheng Cheng, CME's Founder and CEO, commented, "With this capital infusion from the sale of the Series A Convertible Preferred Stock, we have an additional $30 million in cash and potentially $10 million from the warrants, to fund our business expansion plans. In addition to enlarging our market share and geographic coverage through agreements with additional bus operators, we are now exploring possible M&A opportunities. We are delighted to have Starr International, a respected investment firm with a significant presence in China and the US, as one of our major investors and we are delighted in the firm's confidence in CME, our business plan and growth prospects."

Jacky Lam, CME's CFO added, "We are pleased with the valuation that Starr International offered and appreciate the thoroughness of their validation procedures. Having worked with them over the past several months on negotiating the terms of the investment, we believe that they have gotten to know CME's business and management and their decision to proceed is a strong vote of confidence in our business model."

L. Scott Greenberg, Executive Vice President of Starr International said, "We look forward to a long and mutually beneficial relationship with Mr. Cheng and the excellent team he has built at CME."

On behalf of Starr International, Mr. John S. Lin, President and CEO of C. V. Starr Investment Advisors (Asia) Limited, said, "We are very excited about our investment in CME, one of the leading players in the out-of-home advertising space in China with strong growth momentum. We believe that CME offers long term value to its investors."

Transaction Terms

Each of the 1,000,000 shares of Series A Convertible Preferred Stock will be convertible at any time into three shares of CME common stock. The newly issued warrants will be exercisable at any time into one share of CME common stock at $6.47 for each warrant held. Concurrently with the closing, certain CME shareholders will transfer an additional 150,000 shares of outstanding CME common stock to Starr International for no additional cash consideration. The convertible stock, the warrants, the common stock underlying the convertible stock and warrants, as well as the 150,000 shares of CME common stock transferred by certain CME shareholders, will be subject to a six-month lock-up period from the date of closing. The convertible stock will only be transferable with the consent of the Company, except to affiliates of Starr International.

Completion of the financing is subject to customary conditions, and the parties expect to move expeditiously toward a closing.

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