This excerpt taken from the CMED 6-K filed Nov 16, 2006.
China Medical Technologies, Inc. Prices US$125 Million Convertible Senior Subordinated Notes
BEIJING, CHINA. (November 15, 2006) China Medical Technologies, Inc. (Nasdaq: CMED) today announced the pricing of US$125 million principal amount of Convertible Senior Subordinated Notes due 2011 to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the Securities Act). China Medical has granted the initial purchaser an option to purchase up to an additional US$25 million principal amount of notes.
The notes will mature on November 15, 2011, and will bear interest at the rate of 3.5% per year, payable semiannually on May 15 and November 15 of each year, beginning May 15, 2007.
The notes are convertible, at the option of the holder, at any time prior to the close of business or the business day immediately preceding the stated maturity date, into China Medicals American Depositary Shares, or ADSs, at a conversion rate of 31.0318 ADSs per US$1,000 principal amount of notes, which is equal to a conversion price of approximately US$32.23 per ADS. Each ADS represents ten of China Medicals ordinary shares. Upon conversion, China Medical may elect to deliver, in lieu of ADSs, cash or a combination of cash and ADSs.
In connection with the sale of the notes, China Medical will file with the U.S. Securities and Exchange Commission within 120 days after date of the original issuance of the notes and use its commercially reasonable efforts to cause to become effective within 210 days after the original issuance of the notes, a shelf registration statement with respect to the resale of the notes and the issuance of restricted ADSs issuable, if any, upon conversion of the notes.
China Medical will use the net proceeds from the offering to repurchase approximately US$30 million worth of its ADSs contemporaneously with the closing of the sale of the notes. China Medical intends to use the remaining proceeds from the sale of the notes for general corporate purposes and for the acquisitions of businesses, products and technologies that it believes will compliment its existing business.
The notes were placed in a private placement transaction pursuant to Rule 144A under the Securities Act of 1933, have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful.