CDC seeks to repurchase portion of 3.75% exchangeable convertibles

By Angela McDaniels

Tacoma, Wash., Sept. 24 - CDC Corp. said it is discussing the possibility of partial repurchases and/or other potential debenture modifications with several holders of its $168 million 3.75% senior exchangeable convertible debentures due 2011.

The aim of the discussions is to reduce future interest payments and future amounts due at maturity or upon exercise of the put option in November 2009, according to a company news release.

The repurchases would be made from time to time in open-market or privately negotiated transactions and would be paid for with cash, stock or a combination of cash and stock.

"Our core businesses are performing well despite the global recession, and we expect to continue to generate positive cash flow from operations. As a result, we believe that, subject to the results of these discussions, it may be feasible to redeem a portion of our debentures early," chief executive officer Peter Yip said in the release.

Any transactions that emerge from the discussions would be subject to board approval, the terms and conditions of the debentures and customary closing conditions.

The company issued the notes in 2006 to 12 institutional investors led by Evolution Capital Management LLC. If there is an initial public offering of at least $100 million for either CDC Software or CDC Games, then the notes become exchangeable into that company's common shares.

CDC is a Hong Kong-based provider of enterprise software, online games and internet and media services.

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