China Growth Equity Investment Ltd. (stock symbol: CGEI) completed its initial public offering on May 27, 2011 selling 5,000,000 units at $10.00 per unit. The underwriter elected not to exercise the over-allotment option. The gross proceeds totaled $50 million, down from the $60 million that the company was looking to raise when it filed its initial S-1 registration statement on April 6, 2011. A total of $50,250,000, equal to $10.05 per common share, has been placed into an escrow account. This balance includes $2,975,000 from the sale of warrants to certain of the insiders and $2,250,000 in fees deferred by the underwriters. In the event that the company is liquidated, neither the underwriter nor the insiders will receive any of the funds placed into the escrow account.
Up to $605,000 of the interest earned on the trust fund balance can be used to fund expenses related to investigating and selecting a target business and other working capital requirements.
Units: Each unit consists of one share of common stock and one warrant. Each warrant will have the right to purchase one additional share at $12.00 per share.
Number of months to complete an acquisition: February 26, 2013 (21 months)
Percentage of non-insider shares required to block an acquisition: While the company has no intention of proposing an acquisition that will require the consent of its shareholders to approve the acquisition, it will conduct a tender offer and give its shareholders an opportunity to redeem their shares. The company will proceed with an acquisition only if the shares redeemed leave the company with tangible assets in excess of $5,000,001.
Warrant terms: Each warrant will become exercisable at the later of the close of a business combination or one year after the close of the initial public offering. The warrants will expire five years after the completion of a business combination.
Acquisition focus: China Growth Equity Investment Ltd. will be focusing its acquisition efforts on acquiring an operating company in China.
Securities: The securities are listed on Nasdaq. On Wednesday, the common shares (CGEI), warrants (CGEIW) and units (CGEIU) closed at $9.65, $.55 and $10.00, respectively.
The final prospectus: http://www.sec.gov/Archives/edgar/data/1517130/000114420411032970/v224384_424b4.htm |
