Message #2 From:
NewsBot Date: March 24, 2008 06:10:29 PM
China Shoe Announces Agreement on US$2M Financing; Further Financing Will Fuel Expansion
SHANGHAI, China, March 24 /PRNewswire-FirstCall/ -- China Shoe Holdings
(OTC Bulletin Board: CHSH) today announced that it has entered into an equity
line of credit agreement ('ELC') with Magellan Global Fund, LP (Magellan) that
provides China Shoe with the option to draw down up to $2 million of equity
funding by Magellan at any time over a two year period commencing with the
effectiveness of a registration statement to be filed by the company.
China Shoe management is pleased to point out that the terms of the
financing are beneficial to the long-term growth on the company. Draw downs
on the ELC will be at China Shoe's sole discretion. If China Shoes elects to
make a draw under the agreement, the shares to be issued will be priced at an
8% discount to the average closing bid price of China Shoe's shares during the
pricing period which is at the time of the draw with a 'floor price' of $0.07.
Because there is a floor price, the company will not be subject to a 'death
spiral' or other dilutive terms. In addition, there are no warrants, stock
options or any type of preferred securitization, keeping the transaction
simple and straight-forward.
In connection to this transaction, China Shoe has paid to Magellan a non-
refundable fee of $40,000 through the issuance of an additional 571,429
restricted shares. A registration statement relating to these securities will
be filed in the short future. Upon effectiveness of the registration
statement, an additional fee of $40,000 will be payable to Magellan.
'We are delighted with the agreement with Magellan Global Fund. The
completion of this funding will enable our continual expansion, especially on
the execution of our retail strategy,' according to Mr. Gu XianZhong, Chairman
and CEO of China Shoe. 'In addition, we believe the terms of the equity line
of credit agreement is competitive and it provides us with excellent financial
flexibility for the future while minimizing dilution to shareholders.'
Based in Shanghai, China, China Shoe manufactures, designs and sells
private label and its own branded footwear throughout China and in overseas
markets, principally Japan. China Shoe has its own manufacturing facilities
located in China. China Shoe has built a diversified customer base throughout
China and overseas.
About Magellan Global Fund, LP
Managed by Orinda Advisers LLC, Magellan Global Fund, LP is a U.S.-based
private equity fund with a global partnership outlook. A key player in
structuring and executing early stage investments for both private and public
companies in China, India and Emerging Europe. For more information please
visit: www.magellanglobalfund.com.
