SORL Auto Parts Announces Receipt of a Preliminary Non-Binding Proposal to Acquire the Company

Oct 30, 2015, 21:25 ET from SORL Auto Parts, Inc.

ZHEJIANG, China, Oct. 30, 2015 /PRNewswire/ -- SORL Auto Parts, Inc. (NASDAQ: SORL), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, today announced that its board of directors (the "Board") has received a preliminary non-binding proposal letter, dated October 30, 2015, from Mr. Xiaoping Zhang, Chairman and Chief Executive Officer of the Company, Ms. Shuping Chi and Mr. Xiaofeng Zhang, directors of the Company (collectively, the "Consortium Members"), to acquire all of the outstanding shares of the Company not owned by them or their affiliates for US$2.84 in cash per share.  The Consortium Members currently own in the aggregate approximately 58.8 percent of the total outstanding common shares of SORL.  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 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, that any definitive agreement will be executed relating to the proposed 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.com.cn.

Forward-looking Statements

This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of forward-looking terminology such as "expects," "anticipates," "believes," "targets," "goals," "projects," "intends," "plans," "seeks," "estimates," "may," "will," "should" or similar expressions. These forward-looking statements may also include statements about the Company's proposed discussions related to its business or growth strategy, which are subject to change. Such information is based upon expectations of the Company's management that were reasonable when made, but may prove to be incorrect. All of such assumptions are inherently subject to uncertainties and contingencies beyond the Company's control and upon assumptions with respect to future business decisions, which are subject to change. The Company does not undertake to update the forward-looking statements contained in this press release. These risks and uncertainties may include, but are not limited to general political, economic and business conditions which may impact the demand for commercial vehicles or passenger vehicles in China and the other significant markets where the Company's products are sold, uncertainty regarding such political, economic and business conditions, trends in consumer debt levels and bad debt write-offs, general uncertainty related to possible recessions, natural disasters, the political stability of China and the impact of any of those events on demand for commercial or passenger vehicles, changes in consumer confidence, new product development and introduction, competitive products and pricing, seasonality, availability of alternative sources of supply in the case of the loss of any significant supplier or any supplier's inability to fulfill the Company's orders, cost of labor and raw materials, the loss of or curtailed sales to significant customers, the Company's dependence on key employees and officers, the ability to secure and protect trademarks, patents and other intellectual property rights, potential effects of competition in the Company's business, the dependency of the Company upon the normal operation of its sole manufacturing facility, potential effect of the economic and currency instability in China and countries to which the Company sold its products, the ability of the Company to successfully manage its expenses on a continuing basis, the continued availability to the Company of financing and credit on favorable terms, business disruptions, disease, general risks associated with doing business in China or other countries including, without limitation, foreign trade policies, import duties, tariffs, quotas, political and economic stability, and the other factors discussed in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. For additional information regarding known material factors that could cause the Company's results to differ from its projected results, please see its filings with the SEC, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system (EDGAR) at http://www.sec.gov.

Contact Information

Raymond Lin   +86.139.6777.6556   +86.577.6581.7721  ljf@sorl.com.cn

Phyllis Huang   +86.151.6770.5972   +86.577.6581.7721 phyllis@sorl.com.cn

Investor Relations sorl@compassbell.com

Exhibit A

 

October 30, 2015

Board of Directors SORL Auto Parts, Inc. No. 1169 Yumeng Road    Ruian Economic Development District Ruian City, Zhejiang Province, Zip 325200 People's Republic of China

 

Dear Members of the Board:

We, Xiaoping Zhang, Shuping Chi and Xiaofeng Zhang (collectively, the "Consortium Members") are pleased to submit this preliminary non-binding proposal (the "Proposal") to acquire all of the outstanding shares of common stock of SORL Auto Parts, Inc. (the "Company") that are not already owned by us in a "going private" transaction on the principal terms and conditions described in this letter (the "Proposed Transaction").

1.         Purchase Price.  The purchase price would be US$2.84 per share in cash. We believe that this price provides a very attractive opportunity to the Company's stockholders, as it represents a premium of 40% over the average closing price of the Company's common stock for the last 20 trading days, and a premium of 23.4% over the closing price of the Company's common stock on October 29, 2015.

2.         Funding.  It is intended that the Proposed Transaction will be funded by personal funds of Mr. Xiaoping Zhang, and the Proposed Transaction would not be subject to any financing conditions.

3.         Consortium.  The Consortium Members intend to work with each other exclusively in pursuing the Proposed Transaction.  As of the date hereof, the Consortium Members in the aggregate own approximately 58.8% of the total outstanding shares of the Company's common stock. Please note that the Consortium Members are currently interested only in pursuing the Proposed Transaction and are not interested in selling their shares in any other transaction involving the Company.

4.         Definitive Documentation. We have retained Locke Lord LLP as our legal counsel and are prepared to promptly provide drafts of the definitive documentation of the Proposed Transaction.

5.         Confidentiality.  We intend to promptly file a joint Schedule 13D to disclose this Proposal and our intention as set out in this Proposal. However, we are sure you will agree that it is in our mutual interests to ensure that we proceed in a confidential manner, unless otherwise required by law, until we have executed the definitive agreements or terminated our discussions.

6.         Process and Timeline.   We understand that the Company and its Board of Directors will want to establish a special committee comprised of independent directors to consider this Proposal.  We expect that the special committee will retain its own legal and financial advisors.  We want to stress our willingness and desire to engage in productive and friendly discussions with the special committee and its advisors and to ensure that a process is followed that will result in a fair and mutually beneficial negotiated transaction.  We are hopeful that discussions can begin promptly and lead to the announcement of a friendly, negotiated transaction by the end of 2015.  We anticipate that we would be in a position to commence a tender offer for the remaining Shares promptly following those discussions, unless a different timeline or structure is agreed with the special committee.  We will dedicate the resources necessary to meet this timeline and are open to any suggestions that the special committee may have with respect to timing and structure.

7.         No Binding Commitment.  This Proposal is not a binding offer, agreement or agreement to make a binding offer or agreement at any point in the future. This letter is a preliminary indication of interest by the Consortium Members and does not contain all matters upon which agreement must be reached in order to consummate the Proposed Transaction, nor does it create any binding rights or obligations in favor of any person. The parties will be bound only upon the execution of mutually agreeable definitive documentation.

We would like to thank you for your consideration of this Proposal. We are prepared to work together with you to bring the Proposed Transaction to a successful and timely conclusion. If you have any questions regarding this Proposal, please do not hesitate to contact us.  We look forward to your response.

Very truly yours,

XIAOPING ZHANG     /s/ Xiaoping Zhang Xiaoping Zhang

SHUPING CHI   /s/ Shuping Chi Shuping Chi

 XIAOFENG ZHANG                   /s/ Xiaofeng Zhang Xiaofeng Zhang

 

SOURCE SORL Auto Parts, Inc.



RELATED LINKS

http://www.sorl.cn