CDC buys back more than $60 million 3.75% exchangeables at discount

By Susanna Moon

Chicago, March 9 - CDC Corp. said an affiliate of the company closed the purchase of holdings from two noteholders' 3.75% senior exchangeable convertible notes due 2011 at less than par.

One of the purchases was announced on March 5.

For the purchase that closed Monday, CDC said it paid $7 million in cash at closing and issued $15 million of 8% unsecured promissory notes, payable in two installments in March and September 2010.

With the two recent purchases, the company has purchased the holdings of six of the 11 noteholders, representing more than $60 million of the face value of the outstanding notes.

The agreements with noteholders are consistent with company management's valuation estimate and the results of a previously reported valuation by a third-party independent consultant who valued the notes in the fourth quarter of 2008 at $0.76 per $1.00 principal amount.

"By using a combination of the company's own internal cash, cash generated from operations and today's refinancing, we have been able to purchase more than $60 million in face value of our convertible notes at an average price that is a discount to par value, with no dilution of shareholder equity as a result of these transactions," Peter Yip, chief executive officer of CDC, said in the company's press release.

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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