Boyuan announces brokered private placement of up to $7 million



    
    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES/
    

    TORONTO, April 27 /CNW/ - Boyuan Construction Group, Inc., (TSX-V: BOY &
BOY.DB) a leading builder of commercial, residential and municipal
infrastructure projects in China's fast-growing regions of the Yangtze River
Delta and the city of Sanya on Hainan Island, announced today that it has
engaged Haywood Securities Inc. to act as financial advisor and agent for a
brokered private placement unit offering expected to generate gross proceeds
of up to $7.0 million (CDN).
    The offering will consist of units, each priced at $1,000. Each unit will
consist of 125 common shares, each with a deemed value of $2.00, one secured
convertible debenture with a par value of $750, 250 warrants to purchase
common shares at $2.00 each for a period of up to four years, and 500
non-transferable rights entitling the holder to receive one share upon
exercise of a "Make Good Provision."
    Each Convertible Debenture bears an interest rate of 11.75% per annum,
paid quarterly in arrears and matures on February 28, 2013. Each Convertible
Debenture is, at the election of the holder, convertible into 375 common
shares of Boyuan at the conversion price of $2.00 per common share of Boyuan
plus accrued interest paid in cash. The Conversion Right may be exercised at
the option of the holder commencing one day after closing of the private
placement and until the close of business on the sixth day prior to the
Maturity Date. Holders of Convertible Debentures will be prevented from
converting their Convertible Debentures to the extent that any holder of such
Convertible Debentures would, upon conversion of such debentures, hold 20% or
more of the total issued and outstanding the common shares of Boyuan. Each
Convertible Debenture will be redeemable by Boyuan, at the option of the
holder, subject to certain redemption conditions.
    Each Right will entitle the holder, upon exercise, to receive one make
good escrowed share of Boyuan. Each Right will be exercisable during the
Rights Exercise Period. The Rights Exercise Period shall commence on the date
that Boyuan files on SEDAR its audited annual financial statements for the
year ended June 30, 2010 and ending 30 days thereafter. Any unexercised Rights
will expire on November 30, 2010.
    Under the "Make Good Provision," certain members of Boyuan's management
have agreed to deposit into escrow up to 3.5 million common shares (which will
be issued upon the conversion of Class A Series 1 preferred shares currently
held by certain members of management of Boyuan) equal to the dollar amount of
units purchased at closing of the financing. In the event that Boyuan''s
financial statements for the fiscal year ending June 30, 2010 reflect less
than US$11.5 million of after tax net income, the escrow agent, upon exercise
or deemed exercise, of the Rights during the Rights Exercise Period, will
transfer to the holder of the Rights for no additional consideration, one Make
Good Escrowed Share for each Right exercised by such holder. Following the
expiry of the Rights Exercise Period, all shares remaining in escrow will be
transferred back to Boyuan's management.
    The private placement, which is subject to the completion of definitive
documentation and regulatory approval, is expected to close by May 15, 2009.
    The net proceeds raised by the offering will be used to fund new
construction projects, procure additional equipment, meet insurance bonding
requirements related to new projects and for general working capital purposes.

    About Boyuan Construction Group, Inc.

    Based in Jiaxing City, China, Boyuan Construction Group, Inc. is in the
business of residential and commercial building construction, municipal
infrastructure and engineering projects. In its last three fiscal years ended
June 30, 2008, Boyuan completed more than 120 projects for a number of private
and public sector clients including Cargill and the Dalian Shide Group, a
billion dollar conglomerate whose partners include DuPont, Mitsubishi and GE.
Boyuan's current projects include residential, industrial and mixed-use
developments, including a five-star hotel and a project at the Qingshan
Nuclear Plant, China's first and largest nuclear facility. From its operating
bases in Zhejiang Province and on Hainan Island, Boyuan focuses on
construction projects in China's fast-growing regions of the Yangtze River
Delta and the city of Sanya.

    
    Caution concerning forward-looking statements
    ---------------------------------------------
    
    Statements in this news release, which are not purely historical, are
forward-looking statements and include any statements regarding beliefs,
plans, expectations or intentions regarding the future.
    It is important to note that actual outcomes and Boyuan's actual results
could differ materially from those in such forward-looking statements. Actual
results could differ from those projected in any forward-looking statements
due to numerous factors. Such factors include, among others: (1) the failure
of Boyuan to execute its business plan, (2) the risks arising from Boyuan's
operations generally (such as the ability to secure raw materials, arrange for
manufactured products on a timely basis, and maintain an adequate workforce),
(3) Boyuan's ability to remain competitive as other parties develop and
release competitive projects and services, (4) Boyuan's ability to retain the
employees necessary to continue research and development of current and new
projects and services, (5) the success by Boyuan of the sales of its projects
and services, (6) the impact of competitive products on the sales of Boyuan's
projects and services, (7) the impact of technology changes on Boyuan's
projects and services, (8) Boyuan's reliance on contractual rights such as
licenses and leases in the conduct of its business, (9) general economic
conditions as they affect Boyuan and its current and prospective customers,
(10) the ability of Boyuan to control costs operating, general administrative
and other expenses, and (11) insufficient investor interest in the Boyuan's
securities which may impact on Boyuan's ability to raise additional financing
as required.
    Actual future results may differ from the anticipated results expressed
in the forward-looking statements contained in this press release and Boyuan
does not undertake to update this information. Investors are cautioned against
placing undue importance on forward-looking information contained herein and
should consult Boyuan's disclosure documents filed from time to time on SEDAR
and other public filings which contain a more exhaustive analysis of risks and
uncertainties connected to Boyuan's business.

    
    Neither TSX Venture Exchange nor its Regulation Services Provider (as
    that term is defined in the policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this release.
    

    %SEDAR: 00026251E




For further information:

For further information: Boyuan Construction Group, Inc., Ms. Ren Shu,
Secretary of the Board, +(86) 139 0651 1503, renshu@zjboyuan.com.cn; The
Equicom Group Inc., Joe Racanelli, (416) 815-0700 ext. 243,
jracanelli@equicomgroup.com


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