IND DairyTech Limited announces private placement of convertible preferred
shares to SAIF Partners for up to $30.8 million

VANCOUVER, Nov. 19 /CNW/ - IND DairyTech Limited (TSXV:IND) ("IND" or the "Company") today announced that it has entered into an agreement in principle with SAIF Partners III L.P. ("SAIF") under which SAIF will purchase on a private placement basis up to 59,661,014 Series A Preferred Shares of the Company ("Preferred Shares") at a weighted average price of approximately CAN$0.52 per Preferred Share for aggregate consideration of up to approximately CAN$30.8 million (RMB 200 million) (the "Placement"). (1 CAN$ = 6.50 RMB)

The Placement will close in two tranches. The first tranche of 36,292,679 Preferred Shares, representing approximately 23.5% of the common shares of the Company on a fully-diluted basis, will be issued for consideration of approximately CAN$15.4 million (RMB 100 million). The first tranche closing is expected to take place in December, 2009.

SAIF will be required to purchase a second tranche of 9,340,445 Preferred Shares representing an additional 5.7% of the Company's common shares on a fully-diluted basis for consideration of approximately CAN$6.15 million (RMB 40 million) if (a) the Company's revenues from the sales of milk for the first six months of 2010 represents 55% or more of its total revenues for this six month period, and (b) the Company's net earnings for this six month period are no less than RMB 20 million, as indicated in the Company's financial statements for the second quarter of 2010. If SAIF is required to make the second tranche investment, SAIF is entitled, but not obligated, to increase the size of the second tranche investment by approximately CAN$9.25 million (RMB 60 million) by purchasing an additional 14,027,890 Preferred Shares, representing an additional 7.9% ownership position in the Company on a fully-diluted basis.

The total ownership share for SAIF on a fully-diluted basis after these both tranches have closed will be approximately 33.6%, assuming that SAIF fully exercises its right to increase the size of the second tranche investment.

The Preferred Shares are convertible into common shares of the Company on a 1:1 basis at average conversion price of CAN$0.52 per common share, subject to standard anti-dilution adjustment provisions. The number of common shares issuable upon the conversion of the Preferred Shares is further subject to adjustment in the event that the Company does not meet certain performance criteria for the years ended December 31, 2010 and December 31, 2011. If the Company does not achieve positive after tax-earnings for these periods, the Company shall, at the option of SAIF, issue additional Preferred Shares to SAIF or reduce the Preferred Shares conversion ratio. Assuming that both tranches of the Placement close and that SAIF fully exercises its right to increase the size of the second tranche of the Placement, if these ratchet provisions are fully triggered, SAIF's ownership share in the Company could increase up to 46.67% on a fully diluted basis with an effective minimum issue price of CAN$0.30 per share.

The proceeds of the Placement will be used by the Company to fund its business expansion, working capital and capital expenditure in accordance with the Company's budget and business plan.

The Placement is subject to completion of standard technical, legal and financial due diligence and the negotiation and entering into of definitive documentation and to receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange.

SAIF Partners is a leading private equity firm that provides growth capital to companies in Asia. Its primary areas of focus include business services, financial services, communications, consumer services, education services, healthcare, and manufacturing. SAIF Partners was founded in 2001 and currently manages over US$2 billion across three funds. With over 60 investments over the last six years, SAIF is one of the largest and most active funds in the region. SAIF is a long-term investor with local teams in Hong Kong, China, and India.


IND, through its operating subsidiaries, is an emerging raw milk producer in China that is seeking to become a leading provider of high quality raw milk to the Chinese dairy industry. To meet China's increasing demand for dairy products, the Company is using Canadian cattle genetics and North American farming practices to establish and develop its dairy herd in China. The Company plans to develop its herd in China through the use of advanced breeding techniques employing Canadian Holstein embryos that it intends to use to impregnate surrogate cows. These embryos have been created through in vitro fertilization using sexed semen to achieve an approximate 90% female birth rate. The use of these advanced breeding techniques is expected to allow the Company to rapidly expand its herd. The use of Canadian Holstein embryos also provides a practical solution to China's ban on the import of live Canadian cattle.

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.


This news release contains forward-looking statements and information that are based on the beliefs of management and reflect IND's current expectations. Such statements and information reflect the current view of IND with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking information in this news release includes the proposed investment by SAIF, the terms of the SAIF investment including the ratchet terms,etc.,, as well as the entry into definitive agreements between the Company and SAIF, and the use of proceeds from the SAIF investment.

There are a number of important factors that could cause IND's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others, risks related to whether SAIF completes its due diligence to its satisfaction, whether IND or SAIF or both are able to settle on definitive agreements for the investment, whether the investment transaction will complete based on the terms negotiated or at all, whether any requisite board or shareholder approvals are obtained, and whether the requisite regulatory approvals are obtained.

IND cautions that the foregoing list of material factors is not exhaustive. When relying on IND's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. IND has assumed a certain progression of its business, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. For additional information with respect to certain of these and other factors, refer to the risk factors section of IND's Management's Discussion & Analysis for the quarter ended June 30, 2009 available on SEDAR at

The forward-looking information contained in this news release represents the expectations of IND as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While IND may elect to, it does not undertake to update this information at any particular time except as required in accordance with applicable securities legislation.


For further information: For further information: Jesse Zhu, Chief Executive Officer, IND DairyTech Limited, (604) 522-1619,; James Xiang, Chief Financial Officer, IND DairyTech Limited, (416) 886-1261,

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