Dynex Announces Execution of Agreement to Sell Majority Stake to Chinese Firm
TORONTO, Canada (August 29, 2008). Dynex Power Inc. (TSX VENTURE: DNX) ("Dynex"), one of the world’s leading independent suppliers of specialist, high power semiconductor products, is pleased to announce that the company has entered into a definitive arrangement agreement dated August 29, 2008 with Zhuzhou CSR Times Electric Co., Ltd. (“Times Electric”) pursuant to which Times Electric will acquire in an all cash transaction 75% of the outstanding common shares of Dynex at a price of $0.55 per common share. These terms are consistent in all material aspects with the terms in the Letter of Intent between the two parties announced on March 31, 2008.
The Board of Directors has unanimously approved the transaction and is unanimously recommending that shareholders vote in favour of the transaction. Dynex’s largest shareholders, Messrs. David Banks and Daniel Owen, both independent directors of Dynex, who between them own approximately 42% of the common shares, have entered into a support agreement under which they have irrevocably undertaken to vote their shares in favour of the transaction. The Company announced its intention to immediately call a Special Meeting of shareholders to formally approve the transaction.
Dr. Paul Taylor, President and Chief Executive Officer of Dynex, said, “I am delighted that we have signed this agreement. Over the past few months we have held detailed and fruitful discussions with the management of Times Electric and during that time we have become highly enthusiastic about the benefits that this transaction will deliver to our operations in Lincoln, UK. The potential of bringing our power module, advanced high power bipolar and R&D capabilities together with Times Electric’s capital resources, manufacturing capability and their large internal requirement for power products, offers great opportunity for the future development of Dynex.”
Times Electric has stated its intention to retain the services of the senior management team as well as retain Dynex’s manufacturing plant in Lincoln, England.
Times Electric is a joint stock limited company incorporated in Hunan Province in the People’s Republic of China. It is listed on the Hong Kong stock exchange. Times Electric is the leading train-borne electrical system provider and integrator for the railway industry in China. It possesses comprehensive capabilities in research and development, design, manufacture, sales and customer service. It is also engaged in developing, manufacturing and selling train power converts, auxiliary power supply equipment and control systems for trains for urban rail systems. In addition, Times Electric designs, manufactures and sells electrical components including power semiconductor devices.
David Banks, Chairman of Dynex commented, “The Board is delighted that the definitive documents have been executed for this transaction. We have taken independent advice to confirm our satisfaction that the price is fair and we are delighted to have your company in the hands of majority owners who will help it achieve the great destiny we know it can enjoy as well as look after our employees. The Times Electric people have impressed us with their commercial skills and integrity. Through this process we have developed great respect for their capabilities. We are therefore very pleased to present this transaction to our shareholders.” Mr Banks continued “the logic behind this transaction remains as explained on previous occasions: to find a high quality owner with greater financial resources who provide synergistic opportunities for Dynex’s future growth.”
The transaction is to be carried out by way of a statutory plan of arrangement and is subject to the approval of two-thirds of the votes cast by Dynex shareholders at a meeting of shareholders, currently expected to be held on or about the 23rd October 2008, as well as Court approval. The transaction is also subject to certain other customary conditions, including receipt of regulatory approvals which includes maintaining the company’s status as a publicly-listed company on the TSX-V. The proposed transaction is expected to close at the end of October, shortly after the receipt of shareholder and Court approvals.
Dynex expects to send an information circular relating to the transaction to shareholders in the next couple of weeks. A copy of the agreement providing for the transaction will be filed with Canadian securities regulators. The information circular and the agreement providing for the transaction will be available at www.sedar.com.
There can be no assurance that the proposed transaction will be consummated and as a result investors are cautioned against trading in Dynex common shares based on the signing of this agreement.