SHANGHAI, Dec. 9, 2010 /PRNewswire-Asia-FirstCall/ -- China-Biotics, Inc. ("China-Biotics" or "the Company"), (Nasdaq: CHBT) the leading developer, manufacturer and distributor of probiotics products in China, today announced that it has redeemed $25 million in outstanding 4 percent senior convertible promissory notes for cash two days before the December 11, 2010 maturity date.
The $1,000 notes were originally issued on December 11, 2007. The redemption price is 100 percent of the principal amount per convertible note, plus accrued and unpaid interest as of the redemption date of December 11, 2010. The total redemption cost is $25 million in convertible note principal, plus approximately $4.68 million in accrued and unpaid interest. The convertible note principal is equivalent to 2.08 million common shares. With this redemption, the total diluted share count for computation of EPS is now reduced to 22.3 million shares. As of September 30, 2010, cash and cash equivalents were $158.8 million.
Mr. Jinan Song, Chairman and CEO of China-Biotics, commented, "We are very pleased to retire our only interest-bearing debt instrument. Redemption of these convertible notes enhances shareholder value through substantially strengthening our balance sheet and creating immediate accretion of our earnings per share. With our proven track record to consistently generate free cash-flow, we plan to continue to leverage our strong balance sheet to propel rapid sales growth and fund strategic expansion in production going forward. We believe this key milestone enables us to upgrade our shareholder base to higher quality long-term investors."
China-Biotics, Inc. ("China-Biotics" or "the Company"), a leading manufacturer of biotechnology products and supplements, engages in the research, development, marketing and distribution of probiotics dietary supplements in China. Through its wholly owned subsidiaries, Shanghai Shining Biotechnology Co., Ltd. and Growing Bioengineering (Shanghai) Co. Ltd., the Company develops and produces a proprietary product portfolio. Currently, its retail products are sold over the counter, mainly through large distributors, to pharmacies and supermarkets in Shanghai and Jiangsu and Zhejiang provinces. The Company also sells bulk products to institutional customers such as dairy and animal feed producers as well as pharmaceutical companies. In February 2010, China-Biotics began its commercial production in China's largest probiotics production facility to meet the growing demand in China. For more information, please visit http://www.chn-biotics.com.
Safe Harbor Statement
The information in this release contains forward-looking statements which involve risks and uncertainties, including statements regarding the Company's capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as "may," "should," "will," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential," "forecast," "project," or "continue," the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results. Any or all of the Company's forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions, risks and uncertainties and other factors which could cause actual events or results to be materially different from those expressed or implied in the forward-looking statements. In evaluating these statements, readers should consider various factors, including the risks described in "Item 1A. Risk Factors" beginning on page 17 and elsewhere in the Company's 2010 Annual Report on Form 10-K. These factors may cause the Company's actual results to differ materially from any forward-looking statement. In addition, new factors emerge from time to time and it is not possible for the Company to predict all factors that may cause actual results to differ materially from those contained in any forward- looking statements. The Company disclaims any obligation to publicly update any forward-looking statements to reflect events or circumstances after the date of this document, except as required by applicable law.
SOURCE China-Biotics, Inc.