CDC buys back some more 3.75% exchangeables at discount

By Susanna Moon

Chicago, March 2 - CDC Corp. said an affiliate of the company repurchased the holdings of two noteholders' 3.75% senior exchangeable convertible notes due 2011 at less than par.

With these purchases, the company has acquired $29.5 million, or 18%, of the par value of its $168 million of notes from five of the 11 separate noteholders.

CDC said it continues to pursue discussions about early purchases of outstanding notes with the remaining noteholders.

As noted on Dec. 29, the company will pay about 76 for the notes, in line with a third-party independent consultant's assessment of the fair value of the notes.

The buyback follows the closing of previously announced agreements with other noteholders to purchase their entire holdings at less than par value.

"We continue to feel that additional purchases will not only help to decrease our debt, but also help strengthen our financial condition and prospects," Peter Yip, chief executive officer of CDC, said in a news release.

"As we have stated previously, we believe these negotiated purchases of notes below par value are fair for both parties in light of current overall economic conditions. We intend to continue to explore our alternatives and seek amicable settlements on the fair value of the remaining portion of our notes."

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. It announced the possibility of a partial repurchase on Sept. 24.

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