ZHEJIANG, China–SORL Auto Parts, Inc. (SORL) a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, announced today that its Board of Directors has received a non-binding preliminary proposal letter, dated April 25, 2019, from Mr. Xiaoping Zhang, its Chairman and Chief Executive Officer, Ms. Shuping Chi and Mr. Xiaofeng Zhang, directors of the Company, and Ruili Group Co., Ltd. to acquire all of the outstanding shares of common stock of the company not already owned by the consortium for US$4.26 per share of common stock in cash. Ms. Chi is the wife of Chairman Zhang and Mr. Xiaofeng Zhang is the brother of Chairman Zhang.
The $4.26 per share price of the proposal represents a 13.9% premium over the Company’s last closing price on April 24, 2019, a premium of approximately 35.64% to its average closing price during the last 30 trading days, and a premium of approximately 36.93% to its average closing price during the last 60 trading days.
The members of the Consortium currently beneficially own in the aggregate approximately 58.9% of the issued and outstanding shares of common stock of the Company on a fully diluted basis.
The Consortium has engaged O’Melveny & Myers LLP as their legal advisor and Huatai United Securities Co., Ltd. as their financial advisor for the proposed transaction. The Consortium intends to fund the proposed transaction with cash on hand and the proposed transaction will not be subject to a financing condition. A copy of the proposal letter is attached hereto as Exhibit A.
The Board intends to form a special committee consisting of independent directors to consider the proposal. The Board expects that the special committee will retain independent advisors, including independent financial and legal advisors, to assist it in this process.
The Company cautions that this proposal constitutes only a preliminary indication of the Consortium’s interest and does not constitute any binding commitment with respect to the transaction proposed or any other transaction. No agreement, arrangement or understanding between the Company and the Consortium relating to any proposed transaction, will be created until such time as definitive documentation has been executed and delivered by the Consortium to the Company and all other appropriate parties.
The Board cautions the Company’s shareholders and others considering trading the Company’s securities that the Board has just received the proposal letter and has not had an opportunity to carefully review and evaluate the proposal or make any decision with respect to the Company’s response to the proposal.
There can be no assurance that any definitive offer will be made by the Consortium, that any definitive agreement will be executed relating to the proposal or any other transaction, or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.
About SORL Auto Parts, Inc.
As a global tier one supplier of brake and control systems to the commercial vehicle industry, SORL Auto Parts, Inc. is the market leader for commercial vehicles brake systems, such as trucks and buses in China. The Company distributes products both within China and internationally under the SORL trademark. SORL is listed among the top 100 auto component suppliers in China, with a product range that includes 65 categories with over 2000 specifications in brake systems and others. The Company has four authorized international sales centers in UAE, India, the United States and Europe. SORL is working to establish a broader global sales network. For more information, please visit http://www.sorl.cn.
