CDC Corporation Announces that it Intends to Take Steps to Strengthen Corporate Governance at Majority-Held CDC Software
19 Mayo 2011 - 6:30AM
Business Wire
CDC Corporation (NASDAQ: CHINA), a leading China-based
value-added operator of, and growth investor in, hybrid
(SaaS/On-Premise) enterprise software, IT Services, and New Media
assets, today announced it intends to take steps to strengthen
corporate governance at its majority held, publicly-traded
subsidiary, CDC Software (NASDAQ: CDCS). As of May 18, 2011, CDC
Corporation owned approximately 87% of the outstanding capital of
CDC Software. Specifically, CDC Corporation has agreed to
effectively eliminate the A/B dual class share structure at CDC
Software by converting its class B shares into class A shares. CDC
Corporation currently owns class B shares, which hold 10-1 voting
rights as compared to the class A shares, which consist of the
public float. The single class structure will give every
shareholder equal rights.
In addition, CDC Software intends to take steps to institute a
semi-annual dividend policy. CDC Corporation intends to use a
portion of the proceeds from any dividend to pay down the
intercompany loan owed to CDC Software.
CDC Software currently intends that the dividend policy will
commence in the second half of 2011 subject to its receipt of
requisite approvals and certain conditions, and will provide more
information as it progresses with these plans.
“We are very pleased that CDC Corporation is taking these
actions to unlock shareholder value,” said John Clough, Chairman of
CDC Software. “We believe that these steps will help strengthen
corporate governance at CDC Software by treating all shareholders
with the same rights and reducing, or eventually eliminating, the
intercompany debt between CDC Software and CDC Corporation. Based
on feedback from our shareholders, we believe these are two major
overhangs on our stock price. As such, we believe these actions
will reward our shareholder base and ultimately help CDC Software
stock trade closer to, or in-line with, our industry peer group
rather than the significant discount it now exhibits.”
About CDC Corporation
CDC Corporation is a China-based value-added operator of, and
growth investor in, hybrid (on premise and SaaS) enterprise
software, IT, and new media businesses. The company pursues two
value-added investment strategies. The first strategy includes
actively managing majority interests in its core portfolio of
hybrid enterprise software, IT services and New Media businesses,
adding value by driving operational excellence, top-line growth and
overall profitability. The third strategy includes identifying and
executing on opportunities to co-invest with leading venture
capital and private equity funds through minority interests in
fast growth companies in emerging markets related to CDC
Corporation’s core assets. This third strategy, which complements
the first, helps to mitigate risk and enhance deal flow for the
company. CDC Corporation expects to deliver superior returns and
additional value for its shareholders through these strategies, as
well as through its plans to declare and pay regular dividends in
the form of registered shares of its publicly listed subsidiaries
and other assets. For more information about CDC Corporation
(NASDAQ: CHINA), please visit www.cdccorporation.net.
About CDC Software
CDC Software (NASDAQ: CDCS), The Customer-Driven Company™, is a
hybrid enterprise software provider of on-premise and cloud
deployments. Leveraging a service-oriented architecture (SOA), CDC
Software offers multiple delivery options for their solutions
including on-premise, hosted, cloud-based SaaS or blended-hybrid
deployment offerings. CDC Software’s solutions include enterprise
requirements planning (ERP), manufacturing operations management,
enterprise manufacturing intelligence, supply chain management
(demand management, order management and warehouse and
transportation management), global trade management, eCommerce,
human capital management, government and not-for-profit, customer
relationship management (CRM), complaint management, business
intelligence/analytics and aged care solutions.
CDC Software’s recent acquisitions are part of its “integrate,
innovate and grow” strategy. Fueling the success of this strategy
is the company’s global scalable business and technology
infrastructure featuring multiple complementary applications and
services, domain expertise in vertical markets, cost effective
product engineering centers in India and China, a highly
collaborative and fast product development process utilizing Agile
methodologies, and a worldwide network of direct sales and channel
operations. This strategy has helped CDC Software deliver
innovative and industry-specific solutions to more than 10,000
customers worldwide within the manufacturing, distribution,
transportation, retail, government, real estate, financial
services, health care, and not-for-profit industries. For more
information, please visit www.cdcsoftware.com.
Cautionary Note Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995. These forward-looking statements include
statements regarding our plans and expectations to convert CDC
Corporation’s class B shares of CDC Software into class A shares,
any plans to eliminate the dual class capital structure at CDC
Software, any expectations with respect to the commencement of a
dividend strategy at CDC Software, including the declaration and
payment of dividends, the form thereof, the timing thereof and the
receipt of requisite legal and regulatory approvals, if at all, our
beliefs regarding strengthening corporate governance at CDC
Software, our expectations regarding any repayments of the
inter-company debt owed by CDC Corporation to CDC Software, our
beliefs and expectations regarding the foregoing and the potential
impact and benefit to shareholders, our beliefs regarding the
trading price of CDC Software stock, and overhangs thereon, and
other statements that are not historical fact, the achievement of
which involve risks, uncertainties and assumptions. These
statements are based on management's current expectations and are
subject to risks and uncertainties and changes in circumstances.
There are important factors that could cause actual results to
differ materially from those anticipated in the forward looking
statements, some of which are beyond our control. If any such risks
or uncertainties materialize or if any of the assumptions proves
incorrect, our results could differ materially from the results
expressed or implied by the forward-looking statements we make.
Further information on risks or other factors that could cause
results to differ is detailed in filings or submissions with the
United States Securities and Exchange Commission made by CDC
Corporation in its Annual Report for the year ended December 31,
2009 on Form 20-F filed on June 30, 2010. We also urge you to
review the filings made by CDC Software with the SEC, including its
Annual Report on Form 20F filed the SEC on June 1, 2010. Dividends
may be declared by the board of directors of CDC Software
Corporation considering several factors, some of which may be
beyond CDC Software’s control. No assurances can be given that CDC
Software Corporation will declare and pay any dividend now or in
any future period. Future dividends, if any, may be paid at reduced
rates than those that may be previously-provided, or even
eliminated. We cannot assure you that CDC Software will ultimately
amend its governing documents to eliminate the ability to issue
class B shares in the future. All forward-looking statements
included in this press release are based upon information available
to management as of the date of the press release, and you are
cautioned not to place undue reliance on any forward looking
statements which speak only as of the date of this press release.
The company assumes no obligation to update or alter the forward
looking statements whether as a result of new information, future
events or otherwise. Historical results are not indicative of
future performance. For these and other reasons, investors are
cautioned not to place undue reliance upon any forward-looking
statement in this press release.
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