ETC.L Regulatory News (ETC)

6 May 2008 07:02

Et-china.com International Holdings06 May 2008 For immediate release 6 May 2008 ET-CHINA.COM INTERNATIONAL HOLDINGS LIMITED ("Et-china", "the Group" or "the Company") £5.5m Fundraising Et-china.com International Holdings Limited, the leading travel services groupin the fast growing region of South China, announces today that it has agreed toissue £5,500,000 in aggregate principal amount of Zero Coupon Convertible Bondsdue 2011 (the "Bonds"). The Bonds are not to be listed on any stock exchange andthey cannot be transferred without the consent of the Company. Och-Ziff andEllerston Capital have each agreed to subscribe for £2.5m worth of the Bonds andLFG Group has subscribed for the balance. (the "Investors"). Et-china.com currently operates in two travel market segments, FrequentIndependent Travel (FIT), (encompassing both independent corporate and leisure)through Et-china; and group leisure travel through its 53.95 per cent. ownedsubsidiary, GZL. In addition, Et-china operates a dedicated e-ticketing serviceplatform exclusively for China Southern Airlines and its group subsidiaries.The new funds provided by the convertible bonds will be used to accelerate thegrowth of Et-China.com's expansion through: • Pursuing identified strategic acquisitions in the tour operator and travel agency segments to increase critical mass and take advantage of the fragmented nature of the Southern Chinese travel market • A step up of the current marketing campaign in order to build upon the significant growth we are already achieving in the Frequent Independent Travel segment. The subscribers are Och-Ziff, a leading, global institutional alternative assetmanagement firm. It is one of the largest alternative asset managers in theworld, with approximately $30 billion of assets under management for over 700fund investors as of September 30, 2007. Och Ziff has strong investment trackrecord spanning more than 13 years. Ellerston Capital is a specialist absolutereturn fund manager, wholly owned by Consolidated Press Holdings one ofAustralia's largest private investment groups, controlled by the Packer family.The third subscriber is LFG Group, an existing investor and a fund controlled byAustralia's Lowy family. The Bonds are unsecured and convertible at any time at the option of theInvestors into Ordinary Shares in the Company at an initial conversion price of£1.15 (the "Initial Conversion Price"). The Initial Conversion Price shall bereset automatically at the end of 6 months, and half yearly after that (the"Reset Dates"), if for thirty consecutive Trading Days ending on a Reset Datethe average daily volume weighted average price (the "VWAP") of the OrdinaryShares is less than the conversion price in effect on that Reset Date. However,no adjustment shall be made if it would cause the conversion price to be lessthan £0.80. In addition, the Bonds will convert automatically if the average daily VWAP ofthe Ordinary Shares is equal to or greater than £2.30 for thirty consecutivedays after an agreement which would effect a reverse takeover has been notifiedto the Company or a firm intention to make a takeover offer for the Company hasbeen announced. Under the terms of the Bonds, the Investors have a put option at the end of yeartwo, on a change of control or on a de-listing of the Company (the "Put Option").If an Investor exercises its Put Option, the Company will redeem that Investor'sBonds at their principal amount plus an amount that would equal a yield of 7% calculated on a semi-annual basis. Matthew Ng, President and Chief Executive Officer, commented: "We are delighted to have raised £5.5m which will allow us to enter the nextphase of our development. The travel market in China continues to providetremendous opportunities and these new funds will enable Et-china toaggressively capture market share. "We are also pleased that this bond issue has been supported by a small numberof high quality investors, namely Och-Ziff, Ellerston Capital and LFG, all witha keen eye on the Chinese travel market, to have this support in the currentvolatile climate is a clear endorsement of our growth strategy." Et-China will release its final results for the year to 31 December 2007 inmid-May. - Ends - Contact details for enquiries: Et-china.com International Holdings Limited 0207 067 0700Matthew NgIan Smith Seymour Pierce, Nominated Adviser and Broker 0207 107 8000Mark Percy Weber Shandwick Financial 0207 067 0700Terry GarrettStephanie BadjonatJohn Moriarty This information is provided by RNS The company news service from the London Stock Exchange