CHINA TRANSINFO TECH CP 8-K 2009
Documents found in this filing:
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): February 6, 2009 (February 3, 2009)
CHINA TRANSINFO TECHNOLOGY CORP.
(Exact name of registrant as specified in its charter)
07 Floor E-Wing Center
No. 113 Zhichunlu, Haidian District
Beijing, China 100086
(Address of Principal Executive Offices)
(86 10) 82671299
Registrant’s Telephone Number, Including Area Code:
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On February 3, 2009, China TransInfo Technology Corp.(the “Company”), through its indirect Chinese subsidiaries, Oriental Intra-Asia Entertainment (China) Limited (“Oriental”) and Beijing PKU Chinafront High Technology Co., Ltd. (“PKU”), entered into a series of equity transfer agreements with China TransInfo Technology Group Co., Ltd., a company incorporated under Chinese law (the “Group Company”), pursuant to which the Company transferred all of its indirect equity interests in PKU and PKU’s subsidiaries to the Group Company.
Incorporated in China on May 26, 2008, the Group Company is wholly owned by four Chinese affiliates of the Company, Shudong Xia, the Company’s Chairman, CEO and President and the beneficial owner of approximately 43% of the Company’s outstanding capital stock, Zhiping Zhang, the Company’s Vice President of Research and Development, Zhibin Lai, the Company’s Vice President and Wei Gao, the designee of SAIF Partners III L.P., a 11% shareholder of the Company (collectively, the “Group Company Shareholders”). Through Oriental and PKU, the Company entered into the following specific agreements to transfer all of its equity interests in its respective Chinese subsidiaries to the Group Company (the “Equity Transfer”):
In connection with the Equity Transfer, on February 3, 2009, the following contractual arrangements were also made among relevant parties, which have given the Company contractual rights to control and manage the business of the Group Company and the Group Company’s subsidiaries (the “Contractual Arrangement” and together with the Equity Transfer, the “Restructuring”):
The main purpose of the Restructuring is to allow the Company to engage in three new business segments, including online services, taxi advertising, and security and surveillance related business in China in which companies with foreign ownership, like the Company and its subsidiaries, are either prohibited or restricted from operating under the current applicable Chinese laws and regulations. As a result of the Restructuring, the Company transferred all of its indirect equity interests in PKU and PKU’s subsidiaries to the affiliated Group Company and accordingly, PKU and PKU’s subsidiaries became direct and indirect subsidiaries of the Group Company, which is wholly owned by the Group Company Shareholders who are all Chinese citizens. At the same time, through the Contractual Arrangement, the Company maintains substantial control over the VIE Entities’ daily operations and financial affairs, election of their senior executives and all matters requiring shareholder approval. Furthermore, as the primary beneficiary of the VIE Entities, the Company is entitled to consolidate the financial results of the VIE Entities in its own consolidated financial statements under FASB Interpretation No. 46R “Consolidation of Variable Interest Entities” (“FIN 46R”). As a result the Restructuring, the Company is able to engage in these three new business segments through the VIE Entities and derive the economic benefits that it would otherwise have as the owner of VIE Entities while still complying with Chinese laws.
The foregoing description does not purport to be a complete statement of the parties’ rights and obligations under the Restructuring Documents or the transactions contemplated thereby or a complete explanation of the material terms thereof. The foregoing description is qualified in its entirety by reference to the Restructuring Documents attached hereto as Exhibits.
For more detailed information regarding the Restructuring, please see the definitive Information Statement on Schedule 14C filed on January 12, 2009, which was mailed to the Company’s stockholders of record on the same day.
Item 2.01. Completion of a Acquisition or Disposition of Assets.
On February 3, 2009, the Company consummated the Restructuring as contemplated by the Restructuring Documents and as a result, the Group Company acquired all of the Company’s indirect equity interests in PKU and PKU’s subsidiaries. The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference in its entirety.
As described above, the Company is transferring the equity interests in its indirectly owned Chinese subsidiaries to a company that it controls and is therefore its affiliate. The transferee company is owned by affiliates of the Company and pursuant to the Restructuring Documents, the Company has substantial control over the affiliated VIE Entities’ daily operations and financial affairs, election of their senior executives and all matters requiring shareholder approval. Furthermore, as the primary beneficiary of the VIE Entities, the Company is entitled to consolidate the financial results of these affiliated Chinese companies in its own consolidated financial statements under FIN 46R. As a result, although PKU and PKU’s subsidiaries were the only operating companies of the Company, the Company does not believe that the Equity Transfer constitutes a disposition of a significant amount of the Company’s assets that requires disclosure under Item 2.01 of the Form 8-K. Nevertheless, the Company believes it is beneficial for its shareholders and investors to have the information as required by Item 2.01 of the Form 8-K.
Because FIN 46R requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss for the variable interest entity or is entitled to receive a majority of the variable interest entity’s residual returns, the financial results of the VIE Entities will be consolidated in the Company’s financial statements. As a result, the Company will not file the pro forma financial information as it will not be able to provide the shareholders with information about the continuing impact of the Restructuring by showing how it might have affected historical financial statements if the Restructuring had been consummated at an earlier time.
Item 9.01. Financial Statements and Exhibits.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
China TransInfo Technology Corp.
Date: February 6, 2009
/s/ Shudong Xia
Chief Executive Officer