1 Jul 2010 07:00
1 July 2010
GEONG International Limited
("GEONG" or "the Company")
Completion of £5 million Equity Financing Facility
GEONG International Limited (AIM: GNG), the AIM listed China based provider of enterprise content management (ECM) software and solutions, is pleased to announce that it has secured a 3 year Equity Financing Facility of up to £5 million (the "EFF") with Darwin Strategic Limited ("Darwin"). The Company intends to draw down on the facility solely to bolster acquisition funding.
Terms of the EFF
The EFF agreement, which is dated 1 July 2010, provides GEONG with a facility which (subject to certain limited restrictions) can be drawn down at any time over the next 3 years. The timing and amount of any draw down is at the discretion of GEONG.
GEONG is under no obligation to make a draw down and may make as many draw downs as it wishes, up to the total value of the EFF, by way of issuing subscription notices to Darwin. Following delivery of a subscription notice, Darwin will subscribe and GEONG will allot to Darwin new ordinary shares of £0.01 each in GEONG ("Ordinary Shares").
The subscription price for any Ordinary Shares to be subscribed by Darwin under a subscription notice will be at a 7.5% discount to an agreed reference price determined during 15 trading days following delivery of a subscription notice (the "Pricing Period"). GEONG is also obliged to specify in each subscription notice a minimum price below which Ordinary Shares will not be issued. The Company will have the right (with the agreement of Darwin) to modify that minimum price at any time during the relevant Pricing Period.
The number of Ordinary Shares which may be issued under any individual subscription notice will primarily be determined by reference to the average daily trading volume of GEONG's ordinary shares over the 15 trading days preceding the issue of the relevant subscription notice. This may be reduced in certain circumstances, including where the minimum price is not maintained. There is also an over-allotment facility available to GEONG, under which GEONG may, in any subscription notice, authorise Darwin at Darwin's discretion to increase the amount of the draw-down by up to the aggregate undrawn amount under the EFF, subject to certain limited restrictions.
Any subscription notice which GEONG may issue will only be valid to the extent that it has the requisite shareholder authority to issue the maximum number of Ordinary Shares that Darwin may be required to subscribe under the relevant subscription notice.
Darwin or the Company may terminate the EFF in specified circumstances. The issue of subscription notices is subject to specified pre-conditions. The Company has provided warranties and indemnities to Darwin and affiliated persons.
Cost of the EFF
Under the agreement, a fee of £75,000 is payable in cash by the Company to Darwin. The payment will be divided into three equal instalments, due upon signing, on 1 April 2011 and on 1 October 2011. In addition, the Company has entered into a warrant agreement dated 1 July 2010 for the grant to Darwin of warrants to subscribe for up to 1.5 million Ordinary Shares, such warrants to be exercisable at a price of 42.5 pence per share and to be exercisable at any time prior to the expiry of 36 months following the date of the warrant agreement.
Wang Weidong, CEO of GEONG, commented:
"We are pleased to announce the EFF. As set out in our preliminary results announcement today, the facility will provide us with the financial flexibility to support the Group's future acquisition strategy. Our organic business is robust and growing steadily and we are now in a position to expand methodically and acquire businesses which meet our stringent business quality, margin and cash collection criteria. We are delighted to partner with Darwin Strategic, who have demonstrated their commitment to the future of the Company with this facility."
Enquiries:
| GEONG International Limited Henry Tse, Chairman Weidong Wang, CEO Amit Thakar, CFO | Tel: +86 10 5222 0999 |
| Evolution Securities Limited (nominated adviser and joint broker) Barry Saint Esther Lee | Tel: +44 207 071 4300 |
| Darwin Strategic Limited Paul Hennigan/Anand Sambasivan | Tel: 020 3178 6174 |
About GEONG International Limited
Operational since 2000, GEONG specialises in providing online business solutions utilizing ECM software technology. Its products and solutions are to help customers move their business online and to streamline their business processes. These products and solutions are specifically tailored for the Chinese market and could be offered by the twin business model - IaaS (Information as a Service, product licence plus customisation and consultancy services) and SaaS (Software as a Service, long term sales of license, operation and value-added services), where the Company is recognised by Government agencies and numerous blue chip clients as a leader in its field and is a leading provider of such services to the finance services, automotive and telecommunications sectors in China, with operations also in Canada.
GEONG was named The Most Successful Enterprise in ECM Software in China 2007 and 2008 by China's Centre for Information Industry Development and CCID Consulting; and has been one of the fastest growing companies in Asia at the Deloitte Technology Fast 50 China and Deloitte Technology Fast 500 Asia Pacific awards for 5 years. The Company has expanded into North America setting up operations in Canada in 2007.
Registered in Jersey, the Group's operations are headquartered in Beijing. The Company's shares were admitted to AIM in June 2006 and trade under the ticker GNG.L
For more information, please visit www.geong.com
About Darwin Strategic:
Darwin, a majority owned subsidiary of The Evolution Group, provides funding solutions for UK listed PLCs, including Equity Financing Facilities. Darwin's team has extensive experience in both corporate finance and secondary market trading, and can create bespoke funding solutions for companies beyond traditional debt and equity funding.