ZHEJIANG, China, Oct. 30, 2015 /PRNewswire/ -- SORL Auto
Parts, Inc. (NASDAQ: SORL), a leading manufacturer and distributor
of automotive brake systems as well as other key safety-related
auto parts in China, today
announced that its board of directors (the "Board") has received a
preliminary non-binding proposal letter, dated October 30, 2015, from Mr. Xiaoping Zhang, Chairman and Chief Executive
Officer of the Company, Ms. Shuping
Chi and Mr. Xiaofeng Zhang,
directors of the Company (collectively, the "Consortium Members"),
to acquire all of the outstanding shares of the Company not owned
by them or their affiliates for US$2.84 in cash per share. The Consortium
Members currently own in the aggregate approximately 58.8 percent
of the total outstanding common shares of SORL. A copy of the
proposal letter is attached hereto as Exhibit A.
The Board intends to form a special committee consisting of
independent directors to consider the proposal. The Board expects
that the special committee will retain independent advisors,
including independent financial and legal advisors, to assist it in
this process.
The Board cautions the Company's shareholders and others
considering trading the Company's securities that the Board has
just received the proposal letter and has not had an opportunity to
carefully review and evaluate the proposal or make any decision
with respect to the Company's response to the proposal. There can
be no assurance that any definitive offer will be made, that any
definitive agreement will be executed relating to the proposed
transaction or that this or any other transaction will be approved
or consummated. The Company does not undertake any obligation to
provide any updates with respect to this or any other transaction,
except as required under applicable law.
About SORL Auto Parts,
Inc.
As a global tier one supplier of brake and control systems to
the commercial vehicle industry, SORL Auto Parts, Inc. is the
market leader for commercial vehicles brake systems, such as trucks
and buses in China. The Company
distributes products both within China and internationally under the SORL
trademark. SORL is listed among the top 100 auto component
suppliers in China, with a product
range that includes 65 categories with over 2000 specifications in
brake systems and others. The Company has four authorized
international sales centers in UAE, India, the United
States and Europe. SORL is
working to establish a broader global sales network. For more
information, please visit http://www.sorl.com.cn.
Forward-looking Statements
This press release may include certain statements that are not
descriptions of historical facts, but are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements can be identified by
the use of forward-looking terminology such as "expects,"
"anticipates," "believes," "targets," "goals," "projects,"
"intends," "plans," "seeks," "estimates," "may," "will," "should"
or similar expressions. These forward-looking statements may also
include statements about the Company's proposed discussions related
to its business or growth strategy, which are subject to change.
Such information is based upon expectations of the Company's
management that were reasonable when made, but may prove to be
incorrect. All of such assumptions are inherently subject to
uncertainties and contingencies beyond the Company's control and
upon assumptions with respect to future business decisions, which
are subject to change. The Company does not undertake to update the
forward-looking statements contained in this press release. These
risks and uncertainties may include, but are not limited to general
political, economic and business conditions which may impact the
demand for commercial vehicles or passenger vehicles in
China and the other significant
markets where the Company's products are sold, uncertainty
regarding such political, economic and business conditions, trends
in consumer debt levels and bad debt write-offs, general
uncertainty related to possible recessions, natural disasters, the
political stability of China and
the impact of any of those events on demand for commercial or
passenger vehicles, changes in consumer confidence, new product
development and introduction, competitive products and pricing,
seasonality, availability of alternative sources of supply in the
case of the loss of any significant supplier or any supplier's
inability to fulfill the Company's orders, cost of labor and raw
materials, the loss of or curtailed sales to significant customers,
the Company's dependence on key employees and officers, the ability
to secure and protect trademarks, patents and other intellectual
property rights, potential effects of competition in the Company's
business, the dependency of the Company upon the normal operation
of its sole manufacturing facility, potential effect of the
economic and currency instability in China and countries to which the Company sold
its products, the ability of the Company to successfully manage its
expenses on a continuing basis, the continued availability to the
Company of financing and credit on favorable terms, business
disruptions, disease, general risks associated with doing business
in China or other countries
including, without limitation, foreign trade policies, import
duties, tariffs, quotas, political and economic stability, and the
other factors discussed in the Company's Annual Report on Form 10-K
and other filings with the Securities and Exchange Commission. For
additional information regarding known material factors that could
cause the Company's results to differ from its projected results,
please see its filings with the SEC, including its Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on
Form 8-K. Copies of filings made with the SEC are available through
the SEC's electronic data gathering analysis retrieval system
(EDGAR) at http://www.sec.gov.
Contact Information
Raymond Lin
+86.139.6777.6556
+86.577.6581.7721
ljf@sorl.com.cn
Phyllis Huang
+86.151.6770.5972
+86.577.6581.7721
phyllis@sorl.com.cn
Investor Relations
sorl@compassbell.com
Exhibit A
October 30, 2015
Board of Directors
SORL Auto Parts, Inc.
No. 1169 Yumeng Road
Ruian Economic Development District
Ruian City, Zhejiang Province, Zip
325200
People's Republic of China
Dear Members of the Board:
We, Xiaoping Zhang, Shuping Chi and Xiaofeng
Zhang (collectively, the "Consortium Members") are pleased
to submit this preliminary non-binding proposal (the "Proposal") to
acquire all of the outstanding shares of common stock of SORL Auto
Parts, Inc. (the "Company") that are not already owned by us in a
"going private" transaction on the principal terms and conditions
described in this letter (the "Proposed Transaction").
1. Purchase
Price. The purchase price would be US$2.84 per share in cash. We believe that this
price provides a very attractive opportunity to the Company's
stockholders, as it represents a premium of 40% over the average
closing price of the Company's common stock for the last 20 trading
days, and a premium of 23.4% over the closing price of the
Company's common stock on October 29,
2015.
2. Funding. It
is intended that the Proposed Transaction will be funded by
personal funds of Mr. Xiaoping
Zhang, and the Proposed Transaction would not be subject to
any financing conditions.
3.
Consortium. The Consortium Members intend to work with each
other exclusively in pursuing the Proposed Transaction. As of
the date hereof, the Consortium Members in the aggregate own
approximately 58.8% of the total outstanding shares of the
Company's common stock. Please note that the Consortium Members are
currently interested only in pursuing the Proposed Transaction and
are not interested in selling their shares in any other transaction
involving the Company.
4. Definitive
Documentation. We have retained Locke Lord LLP as our legal counsel
and are prepared to promptly provide drafts of the definitive
documentation of the Proposed Transaction.
5.
Confidentiality. We intend to promptly file a joint Schedule
13D to disclose this Proposal and our intention as set out in this
Proposal. However, we are sure you will agree that it is in our
mutual interests to ensure that we proceed in a confidential
manner, unless otherwise required by law, until we have executed
the definitive agreements or terminated our discussions.
6. Process and
Timeline. We understand that the Company and its Board
of Directors will want to establish a special committee comprised
of independent directors to consider this Proposal. We expect
that the special committee will retain its own legal and financial
advisors. We want to stress our willingness and desire to
engage in productive and friendly discussions with the special
committee and its advisors and to ensure that a process is followed
that will result in a fair and mutually beneficial negotiated
transaction. We are hopeful that discussions can begin
promptly and lead to the announcement of a friendly, negotiated
transaction by the end of 2015. We anticipate that we would
be in a position to commence a tender offer for the remaining
Shares promptly following those discussions, unless a different
timeline or structure is agreed with the special committee.
We will dedicate the resources necessary to meet this timeline and
are open to any suggestions that the special committee may have
with respect to timing and structure.
7. No Binding
Commitment. This Proposal is not a binding offer, agreement
or agreement to make a binding offer or agreement at any point in
the future. This letter is a preliminary indication of interest by
the Consortium Members and does not contain all matters upon which
agreement must be reached in order to consummate the Proposed
Transaction, nor does it create any binding rights or obligations
in favor of any person. The parties will be bound only upon the
execution of mutually agreeable definitive documentation.
We would like to thank you for your consideration of this
Proposal. We are prepared to work together with you to bring the
Proposed Transaction to a successful and timely conclusion. If you
have any questions regarding this Proposal, please do not hesitate
to contact us. We look forward to your response.
Very truly yours,
XIAOPING ZHANG
/s/ Xiaoping Zhang
Xiaoping Zhang
SHUPING CHI
/s/ Shuping Chi
Shuping Chi
XIAOFENG
ZHANG
/s/ Xiaofeng Zhang
Xiaofeng Zhang
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/sorl-auto-parts-announces-receipt-of-a-preliminary-non-binding-proposal-to-acquire-the-company-300169847.html
SOURCE SORL Auto Parts, Inc.