F REIGN TRADE - 中国国际贸易促进委员会

NORTH AMERICA
November 2011, told analysts “privatization
is a choice for the company to
continue to be on the healthy path”
given the difficult U.S. capital markets
and numerous short-seller attacks on
the company. His proposal to buy out
the company, with financing by a bank
and a private-equity fund, dating back
to October 2010, would protect shareholders’
interests, he said.
The trend of U.S.-listed Chinese
companies going private will continue
for at least a few years, until U.S. investors
regain their confidence in Chinese
firms and the capital markets recover,
said Donald Yang, managing partner
at Abax Global Capital, an asset manager
in which Morgan Stanley owns
a minority stake. Abax Global, which
oversees $900 million in private-equity
and hedge-fund assets in Hong Kong,
has provided financing for a handful
of companies going private, including
Harbin Electric.
A source of business
Taking companies private has
become a major source of new China
business for Roth Capital. The Newport
Beach, Calif., firm is one of a
growing number of banks that have
sharply scaled back their mainland operations.
Roth Capital, which has raised
more than $3.1 billion in financing
since 2003 for China-based companies
that went public in the U.S. through
IPOs and reverse mergers, was hired
last year as a financial advisor to independent
committees in the going-private
transactions of Yucheng Technologies
Ltd. and Shengtai Pharmaceutical
Inc.
The board-appointed committees’
role is to evaluate the fairness of
buyout offers made by the chairmen
of Yucheng Technologies, a Chinese
provider of information-technology
services, and Shengtai Pharmaceutical,
a maker of pharmaceutical raw materials
such as glucose.
Some in the industry question
whether companies seeking to retreat
from public markets will want to deal
with the same banks and law firms that
brought them there.
Companies may think, “Why are
you going back to the guy who got you
into this?” says Jim O’Neill, co-founder
of Jin Niu Investment Management in
Beijing, which raises capital for Chinese
companies and has advised three
firms in the past year on going private.
Mr. O’Neill said he has spoken with
companies going private that are reluctant
to hire the same advisors who took
them public.
Roth Capital said it has no prior
banking relationship with either company,
but declined to comment further.
Argyle, Texas-based Halter
Financial is advising Si Chen, chief
executive officer of New York Stock
Exchange-listed American Lorain
Corp., a snack-foods company, on a
going-private proposal he has made
to shareholders. Halter, a major player
in helping Chinese companies list in
the U.S. through reverse mergers, also
advised American Lorain on its 2007
reverse merger.
Meanwhile, Loeb & Loeb said it
has worked on nearly a dozen goingprivate
transactions for companies
including Harbin Electric, Fushi Copperweld
and Yongye International Inc.
The law firm has an existing relationship
with some of these companies:
It represented Yongye in its reversemerger
transaction in 2008, and Harbin
Electric and Fushi Copperweld in
financing deals when they upgraded
to the Nasdaq Stock Market from the
OTC Bulletin Board in 2007.
Mr. Nussbaum said the firm’s
role in helping companies access the
U.S. securities market years ago doesn’t
compromise its ability to represent
them now. In privatization transactions,
“there’s a role for someone who
knows the company well,” he said.
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