SHENZHEN, China, Oct. 23, 2012 /PRNewswire/ -- Cogo Group, Inc. (NASDAQ: COGO), one of the leading gateways for global semiconductor companies to access the industrial and technology markets in China, today announced that it had entered into a definitive agreement for the sale of certain subsidiaries to its Chairman and CEO Jeffrey Kang. The main terms of the deal are unchanged from the Company's press release on September 24, 2012.
On September 24, 2012, Cogo began executing a stock buyback program to repurchase its shares on the open market pursuant to a 10b5-1 plan. Given that Cogo's shares trade at approximately 35% of its Tangible Book Value ("TBV") of approximately $6 per share, as reported at the end of the second quarter of 2012, the Company believes that a buyback program is a prudent use of cash.
Mr. Kang commented, "The signing of a definitive agreement regarding my proposal to purchase certain subsidiaries for $78 million brings us one step closer towards maximizing value for shareholders of Cogo. We believe this deal validates the financial assets of Cogo that are currently being significantly discounted by the financial markets and we believe that the ongoing share buybacks are accretive for our shareholders."
About Cogo Group, Inc.:
Cogo Group, Inc. (Nasdaq: COGO) is one of the leading gateways for global semiconductor companies to access the rapidly growing Industrial and Technology sectors in China. Through its unique business-to-business services platform, Cogo designs customized embedded solutions using technology from suppliers including Intel, Broadcom, Xilinx, SanDisk, Freescale, Atmel and others for a customer base of 2,100 Chinese OEMs/ODMs. Cogo's customer list includes approximately 100 blue-chip companies, including ZTE, BYD and NARI, as well as 2,000 Small and Medium Enterprises (SMEs). The Company serves a broad list of rapidly growing end-markets in China, including 3G Smart phones, Tablets, Automotives, High-Speed Railway, Smart Meter/Smart Grid, Healthcare and High Definition Television ("HDTV").
Safe Harbor Statement:
This press release includes certain statements that are not descriptions of historical facts, but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include statements about our proposed discussions related to our business or growth strategy such as growth in digital media, telecommunications and industrial applications businesses, as well as our potential acquisitions which are subject to change. Such information is based upon expectations of our management that were reasonable when made, but may prove to be incorrect. All such assumptions are inherently subject to uncertainties and contingencies beyond our control and upon assumptions with respect to future business decisions, which are subject to change. For further descriptions of other risks and uncertainties, see our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 20-F, and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system (EDGAR) at www.sec.gov.
SOURCE Cogo Group, Inc.