NEW YORK, Feb. 24, 2012 /PRNewswire/ -- Gushan
Environmental Energy Limited ("Gushan" or the
"Company"; NYSE: GU), a leading producer of biodiesel and
manufacturer of recycled copper products in China, today announced that its Board of
Directors has received a preliminary non-binding proposal letter
dated February 24, 2012, from
Mr. Jianqiu Yu, Chairman and Principal Executive Officer of
Gushan, to acquire all of the outstanding ordinary shares of the
Company not currently owned, legally or beneficially, by
Mr. Jianqiu Yu (the "Buyer"), for US$1.599 per American Depositary Share
("ADS") or US$0.1599 per
ordinary share in cash. As of the date hereof, the Buyer
controlled approximately 34.8% of the outstanding shares of the
Company.
According to the proposal letter, the Buyer will form a
transaction vehicle for the purpose of pursuing the proposed
transaction and will finance the proposed transaction with his own
funds, possibly supplemented by debt financing. The proposal
letter also states that Sidley Austin LLP has been engaged by the
Buyer as legal counsel in connection with the proposed transaction.
A copy of the proposal letter is attached hereto as Exhibit A.
The Company's Board of Directors has formed a special committee
of independent directors (the "Special Committee")
consisting of Messrs. Denny Ting Bun
Lee, Kang Nam Chu and
Dongming Zhang to consider the
proposed transaction. The Special Committee intends to retain
advisors, including an independent financial advisor and legal
counsel, to assist it in its work. No decisions have been made by
the Special Committee with respect to the Company's response to the
proposed transaction. There can be no assurance that any definitive
offer will be made, that any agreement will be executed or that
this or any other transaction will be approved or consummated.
About Gushan Environmental Energy Limited
Gushan is a leader in the China
biodiesel industry, in terms of annual production capacity, and one
of the leading biodiesel producers in Asia, in terms of nominal capacity. Gushan
produces biodiesel, a renewable, clean-burning and biodegradable
fuel and a raw material used to produce chemical products,
primarily from used cooking oil, and by-products from biodiesel
production, including glycerine and plant asphalt. Gushan sells
biodiesel directly to users, such as marine vessel operators and
chemical factories, as well as to petroleum wholesalers and
individual retail gas stations. The Company has seven production
facilities, located in the Sichuan, Hebei, Fujian
and Hunan provinces and in
Beijing, Shanghai and Chongqing, with a combined annual production
capacity of 490,000 tons. Gushan's Sichuan production facility is currently in
operation. Gushan also operates a copper products business through
Engen Investments Limited ("Engen"), a 75%-owned subsidiary, that
manufactures copper rods, copper wires, copper granules and copper
pads primarily from recycled copper. Currently, Engen has two
plants, with a daily production capacity of approximately 210 tons
of recycled copper products.
Exhibit A
February 24, 2012
Board of Directors
Gushan Environmental Energy Limited
No. 37, Golden Pond Road
Golden Mountain Industrial District
Fuzhou City, Fujian Province
People's Republic of China
Dear Sirs:
I, Yu Jianqiu, am pleased to submit this preliminary non-binding
proposal (the "Proposal") to acquire the outstanding ordinary
shares of Gushan Environmental Energy Limited (the "Company") and
the American Depositary Shares of the Company ("ADSs", each ADS
representing ten ordinary shares of the Company), in both cases
that are not currently owned by myself and my affiliates in a
going-private transaction (the "Acquisition"). The terms and
conditions of the Proposal on which I contemplate to pursue the
Acquisition are set forth below:
1. Buyer. I intend to form an acquisition vehicle for the
purpose of pursuing the Acquisition.
2. Purchase Price. The purchase consideration payable for each
ADS or ordinary share of the Company (other than those held by
myself and my affiliates) will be $1.599 per ADS or $0.1599 per ordinary share, as the case may be,
in cash, which represents a premium of 30.00% to the Company's
closing price on February 23, 2012
and a premium of 24.15% to the volume-weighted average closing
price during the last 30 trading days. I believe that the proposed
purchase price provides a very attractive and beneficial
alternative to the Company's shareholders.
3. Financing. It is currently expected that the Acquisition will
be primarily financed with my own funds but may be supplemented by
possible debt financing. If necessary, I would enter into
discussions and negotiations, and possibly agreements, with
potential sources of debt financing. At this point in time, there
is no arrangement with any such potential source of debt financing
in relation to the Proposal, and I do not propose to make any
commitment prior to reaching agreement on the transaction terms in
respect of the Acquisition with the Company.
4. Due Diligence. To the extent debt financing is required,
parties providing financing will require a timely opportunity to
conduct customary due diligence on the Company.
5. Definitive Agreements. I am prepared to negotiate and
finalize definitive agreements ("Definitive Agreements") providing
for the Acquisition and related transactions very promptly. Such
Definitive Agreements will provide for conditions and covenants
typical and appropriate for transactions of this type.
6. Confidentiality. I intend promptly to file an amendment to my
Schedule 13D to disclose this letter. However, I am sure you will
agree that it is in all of our interests to proceed in a
confidential manner, other than as required by law, until
Definitive Agreements have been executed or our discussions have
been terminated. If for any reason you find it necessary to make
any disclosure relating to any matter discussed in this letter,
please give me as much notice as possible so that I can respond
appropriately.
7. Process. I believe that the Acquisition will provide superior
value to the Company's shareholders. I recognize that the Board
will evaluate the proposed Acquisition independently before it can
make its determination to endorse it. Given my involvement in the
proposed Acquisition, I also recognize that independent members of
the Board will proceed to consider the proposed Acquisition. In
considering my offer, you should be aware that I am interested only
in acquiring the outstanding shares of the Company that are not
currently owned by myself and my affiliates, and that I do not
intend to sell my stake in the Company to a third party.
8. Advisors. I have retained Sidley Austin LLP as my legal
counsel in connection with the Acquisition.
9. No Binding Commitment. This letter constitutes only a
preliminary indication of my interest, and does not constitute any
binding commitment with respect to the Acquisition or other
transaction. Any commitment will result only from the execution of
Definitive Agreements, and then will be on the terms provided in
such documentation.
I would like to personally express my commitment to work with
the Board to consummate this Acquisition in a timely manner.
Should you have any questions regarding these matters, please do
not hesitate to contact me. I look forward to hearing from
you.
Sincerely,
/s/Yu
Jianqiu
Yu Jianqiu
SOURCE Gushan Environmental Energy Limited