0001144204-11-066149.txt : 20111121 0001144204-11-066149.hdr.sgml : 20111121 20111121152535 ACCESSION NUMBER: 0001144204-11-066149 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20111121 DATE AS OF CHANGE: 20111121 GROUP MEMBERS: ABAX GLOBAL CAPITAL GROUP MEMBERS: ABAX GLOBAL CAPITAL (HONG KONG) LTD GROUP MEMBERS: ABAX LOTUS LTD. GROUP MEMBERS: WISE SUN INVESTMENTS LTD. GROUP MEMBERS: XIANG DONG YANG FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Fu Li CENTRAL INDEX KEY: 0001343135 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: 999 WUYI ROAD JINZHOU DISTRICT STREET 2: DALIAN FUSHI BIMETALLIC MANUFACTURING CO CITY: DALIAN STATE: F4 ZIP: 116100 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Fushi Copperweld, Inc. CENTRAL INDEX KEY: 0000710846 STANDARD INDUSTRIAL CLASSIFICATION: DRAWING AND INSULATING NONFERROUS WIRE [3357] IRS NUMBER: 133140715 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-46672 FILM NUMBER: 111218943 BUSINESS ADDRESS: STREET 1: 1 SHUANG QIANG ROAD, JINZHOU CITY: DALIAN STATE: F4 ZIP: 116100 BUSINESS PHONE: (860)435-7000 MAIL ADDRESS: STREET 1: 1 SHUANG QIANG ROAD, CITY: JINZHOU DALIAN F4 STATE: F4 ZIP: 116100 FORMER COMPANY: FORMER CONFORMED NAME: Fushi Copperweld, Inc DATE OF NAME CHANGE: 20080124 FORMER COMPANY: FORMER CONFORMED NAME: FUSHI INTERNATIONAL INC DATE OF NAME CHANGE: 20060213 FORMER COMPANY: FORMER CONFORMED NAME: PARALLEL TECHNOLOGIES INC DATE OF NAME CHANGE: 19920703 SC 13D/A 1 v241342_sc13da.htm FORM SC 13D/A Unassociated Document
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(AMENDMENT NO. 5 )*

 
Fushi Copperweld, Inc.
(Name of Issuer)
 
Common Stock, Par Value $.006 Per Share
(Title of Class of Securities)
 
36113E107
(CUSIP Number)
 
Li Fu
Wise Sun Investments Ltd.
TYG Center Tower B, Suite 2601
Dongsanhuan Bei Lu, Bing 2
Beijing, 100027
China
(86) 10 8441 7777
Richard Yee
Abax Global Capital (Hong Kong) Limited
Two International Finance Centre
Suite 6708, 8 Finance Street, Central
Hong Kong
(852) 3602 1815
 
 
With copies to:
 
Michael V. Gisser
Peter X. Huang
Skadden, Arps, Slate, Meagher & Flom LLP
30th Floor, China World Office 2
No. 1, Jianguomenwai Avenue
Beijing 100004
China
(86) 10 6535-5599
Akiko Mikumo
Weil, Gotshal & Manges
29/F Gloucester Tower, The Landmark
15 Queen’s Road Central
Hong Kong
(852) 3476 9088
 
 
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
 
November 21, 2011
(Date of Event Which Requires Filing of this Statement)
 
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  o
 
 
Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
 
*
The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
 
 
 
CUSIP No.
36113E107

1.
NAME OF REPORTING PERSON:  Li Fu
 
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)   x
(b)   o
3.
SEC USE ONLY
 
4.
SOURCE OF FUNDS
OO
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): o
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
People’s Republic of China
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
7.
SOLE VOTING POWER
1,837,2231
8.
SHARED VOTING POWER
9,228,4332
9.
SOLE DISPOSITIVE POWER
1,837,2233
10.
SHARED DISPOSITIVE POWER
9,228,433
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,065,6564
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
x
13.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.9%5
14.
TYPE OF REPORTING PERSON
IN
 
1 This includes 61,000 options for shares of Common Stock as described in Item 5.
2 This includes shares directly owned by Wise Sun and members of Mr. Fu’s family as described in Item 5. 
3 This includes 61,000 options for shares of Common Stock as described in Item 5.
4 This excludes shares beneficially owned by Abax Lotus, AGC, Abax HK and Mr. Yang.
5 The percentage of beneficial ownership of each Reporting Person is based on 38,265,138 shares of Common Stock, which includes 38,204,138 shares of Common Stock issued and outstanding as of the date of this statement and 61,000 shares of Common Stock issuable to Mr. Fu upon exercise of certain stock options.
 
 
 
 
 
CUSIP No.
36113E107
 
1.
NAME OF REPORTING PERSON:  Wise Sun Investments Ltd.
 
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)    x
(b)    o
3.
SEC USE ONLY
 
4.
SOURCE OF FUNDS
OO
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): o
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
7.
SOLE VOTING POWER
0
8.
SHARED VOTING POWER
7,930,090 (See Item 5)
9.
SOLE DISPOSITIVE POWER
0
10.
SHARED DISPOSITIVE POWER
7,930,090 (See Item 5)
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,065,6566
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
x
13.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.9%
14.
TYPE OF REPORTING PERSON
CO

6 This excludes shares beneficially owned by Abax Lotus, AGC, Abax HK and Mr. Yang.
 
 
 
 
CUSIP No.
36113E107

1.
NAME OF REPORTING PERSON:  Abax Lotus Ltd.
 
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)   x
(b)   o
3.
SEC USE ONLY
 
4.
SOURCE OF FUNDS
OO, AF
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): o
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
7.
SOLE VOTING POWER
0
8.
SHARED VOTING POWER
205,050
9.
SOLE DISPOSITIVE POWER
0
10.
SHARED DISPOSITIVE POWER
205,050
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
205,0507
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
x
13.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
14.
TYPE OF REPORTING PERSON
CO
 
7 This excludes shares beneficially owed by Mr. Fu.
 
 
 
 
 
CUSIP No.
36113E107

1.
NAME OF REPORTING PERSON:  Abax Global Capital
 
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)   x
(b)   o
3.
SEC USE ONLY
 
4.
SOURCE OF FUNDS
OO, AF
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): o
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
7.
SOLE VOTING POWER
0
8.
SHARED VOTING POWER
205,050
9.
SOLE DISPOSITIVE POWER
0
10.
SHARED DISPOSITIVE POWER
205,050
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
205,0508
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
x
13.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
14.
TYPE OF REPORTING PERSON
CO
 
 
 
 
CUSIP No.
36113E107

1.
NAME OF REPORTING PERSON:  Abax Global Capital (Hong Kong) Limited
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)   x
(b)   o
3.
SEC USE ONLY
 
4.
SOURCE OF FUNDS
OO, AF
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): o
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
Hong Kong
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
7.
SOLE VOTING POWER
0
8.
SHARED VOTING POWER
205,050
9.
SOLE DISPOSITIVE POWER
0
10.
SHARED DISPOSITIVE POWER
205,050
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
205,0509
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
x
13.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
14.
TYPE OF REPORTING PERSON
CO
 
 
 
 
 
CUSIP No.
36113E107

1.
NAME OF REPORTING PERSON:  Xiang Dong Yang
 
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)   x
(b)   o
3.
SEC USE ONLY
 
4.
SOURCE OF FUNDS
OO
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): o
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
Hong Kong
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
7.
SOLE VOTING POWER
0
8.
SHARED VOTING POWER
205,050
9.
SOLE DISPOSITIVE POWER
0
10.
SHARED DISPOSITIVE POWER
205,050
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
205,05010
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
x
13.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
14.
TYPE OF REPORTING PERSON
IN
 
10 This excludes shares beneficially owed by Mr. Fu.
 
 
 
 
 
This Schedule 13D/A (the “Schedule 13D/A”) is filed jointly by Li Fu (“Mr. Fu”), Wise Sun Investments Ltd. (“Wise Sun”), Abax Lotus Ltd. (“Abax Lotus”), Abax Global Capital (“AGC”), Abax Global Capital (Hong Kong) Limited, (“Abax HK”) and Xiang Dong Yang (“Mr. Yang”, and together with Mr. Fu, Wise Sun, Abax Lotus, AGC and Abax HK, the “Reporting Persons”).  With respect to Mr. Fu and Wise Sun, this Schedule 13D/A represents Amendment No. 5 to the statement on Schedule 13D with respect to the Company filed jointly by Mr. Fu and Dalian Fushi Enterprises Group Company, Ltd. (“Fushi Group”) with the SEC on January 13, 2006 (the “Original 13D”), as amended and supplemented by Amendment No. 1, Amendment No. 2, Amendment No. 3 and Amendment No. 4 jointly filed by Mr. Fu and Wise Sun with the SEC on February 10, 2009, November 4, 2010, March 1, 2011 and November 21, 2011, respectively (the “Existing 13Ds”).  This Schedule 13D/A represents Amendment No. 2 to the statement on Schedule 13D with respect to the Company filed by Mr. Yang and Abax HK on November 4, 2010, as amended and supplemented by Amendment No. 1 filed by Mr. Yang and Abax HK with the SEC on March 1, 2011.  This Schedule 13D/A represents Amendment No. 1 to the statement on Schedule 13D with respect to the Company filed by Abax Lotus and AGC on March 1, 2011.
 
Item 2.         Identity and Background
 
The information set forth in this Item 2 shall be deemed to supplement Item 2 of the Schedule 13D/A filed by the Reporting Persons on March 1, 2011 (the “March Schedule 13D/A”), and amend and restate in its entirety Item 2 of the Schedule 13D/A filed by Mr. Fu and Wise Sun on November 21, 2011 (the “2011 November Schedule 13D/A”).
 
(a) This Schedule 13D/A is being filed jointly on behalf of the Reporting Persons. A Joint Filing Agreement among the Reporting Persons is attached hereto as Exhibit 7.01.

Item 3.         Source and Amount of Funds or Other Consideration
 
The information set forth in this Item 3 shall be deemed to supplement Item 3 of the Schedule 13D/A filed by the Reporting Persons (other than Abax Lotus and AGC) on November 4, 2010 (the “2010 November Schedule 13D/A”) and amend and restate in its entirety Item 3 of the 2011 November Schedule 13D/A.

With respect to the proposed transaction described in Item 4 of this Schedule 13D/A, the Reporting Persons anticipate that approximately US$250,000,000 will be expended in acquiring outstanding shares of Common Stock owned by shareholders of the Company other than the Reporting Persons (“Publicly Held Shares”).

Item 4 of this Schedule 13D/A is incorporated herein by reference.
 
Item 4.         Purpose of Transaction
 
The information set forth in this Item 4 shall be deemed to supplement Item 4 of the March Schedule 13D/A and amend and restate in its entirety Item 4 of the 2011 November Schedule 13D/A.

On November 17, 2011, Mr. Fu and AGC (acting on behalf of certain investment funds managed, advised and/or appointed by it) submitted a firm offer (the “Offer”) to a special committee of the Company’s Board of Directors (the “Board”) to acquire all of the Publicly Held Shares at a purchase price of US$9.25 per share (the “Offer Price”) (the “Proposed Transaction”).

Mr. Fu and AGC noted in the Offer that the Offer Price takes into consideration all key due diligence findings and has been revised down from the initial offer price of US$11.50 first indicated to the Board on November 3, 2010.  In addition to the results of due diligence investigations, the downward revision of the Offer Price reflects the Company’s weaker than projected earnings, increasingly challenging macro-economic trends (particularly weaker copper prices and a slow down in the roll-out of 3G networks in China) and the general deterioration in the global credit and equity markets.
 
 
 
 
 
The Offer contemplates that Mr. Fu and an entity or entities nominated by AGC will form an acquisition vehicle (the “Acquirer”) for the purpose of effecting the Proposed Transaction through a merger.  The Offer further contemplates that the Proposed Transaction will be funded through a combination of the proceeds from a term loan facility in the amount of US$200,000,000 from China Development Bank Corporation Hong Kong Branch and the proceeds from an equity investment by, and mezzanine debt financing from, certain investment funds managed, advised and/or appointed by AGC, as well as rollover equity from the Reporting Persons.

On November 17, 2011, in connection with the Proposed Transaction, AGC (on behalf of certain investment funds managed, advised and/or appointed by it) issued a financing commitment letter (“Financing Commitment Letter”) and committed to provide equity and mezzanine debt financing of an aggregate amount of up to US$50,000,000.  The source of funds for such equity and mezzanine debt financing will come from the investors in such funds.

The Offer is subject to the negotiation and execution of a definitive merger agreement and other related agreements mutually acceptable in form and substance to the Company and the Acquirer.  Any such definitive merger agreement entered into in connection with the Proposed Transaction is likely to be subject to customary closing conditions, including approval by the Company’s stockholders of the terms of the Proposed Transaction, accuracy of the representations and warranties given by the parties to the merger agreement, compliance by each party to the merger agreement with its covenants thereunder and the absence of a material adverse effect.  No assurances can be given that any agreement with the Company relating to the Proposed Transaction will be entered into or that the proposed merger will be consummated.

If the Proposed Transaction is completed, the shares of Common Stock would become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Act and would be delisted from the NASDAQ Stock Exchange.

Other than as set forth herein or in the Offer or the Financing Commitment Letter, none of the Reporting Persons have any plans or proposals that relate to or would result in any other action specified in clauses (a) through (j) of Item 4 on Schedule 13D.
 
The information set forth in this response to this Item 4 is qualified in its entirety by reference to the Offer and the Financing Commitment Letter, which are being filed herewith as Exhibits 7.02 and 7.03 respectively, each of which is incorporated herein by reference.
 
Item 5.         Interest in Securities of the Company
 
The information set forth in this Item 5 shall be deemed to amend and restate in their entirety the first, second, third and fourth paragraphs of Item 5(a)-(b) of the 2011 November Schedule 13D/A.
 
 
 
 
 
(a)-(b)  As of the date hereof, Mr. Fu directly holds 1,776,223 shares of Common Stock, plus 61,000 shares of Common Stock issuable to Mr. Fu upon exercise of certain stock options, together, approximately 4.8% of the outstanding Common Stock.
 
Mr. Fu is the holder of record of 100% of the equity interests of Wise Sun, which holds 7,930,090 shares of Common Stock, approximately 20.7% of the outstanding shares of Common Stock.  Mr. Fu has voting and dispositive control over the shares of the Company held by Wise Sun.  Mr. Fu is thereby deemed to have beneficial ownership of such shares.
 
Ms. Xin Liu, wife of Mr. Fu is the holder of record of 1,118,418 shares of Common Stock and Ms. Yunyun Zhang, mother of Mr. Fu, is the holder of 179,925 shares of Common Stock, which together represents approximately 3.4% of the Common Stock outstanding. Mr. Fu may be deemed to have beneficial ownership of the 1,118,418 shares of Common Stock held by Ms. Liu and the 179,925 shares of Common Stock held by Ms. Zhang by virtue of their family relationships. In addition, by verbal agreement, Mr. Fu has voting and dispositive control over such shares held by Ms. Liu and Ms. Zhang, however, Mr. Fu disclaims such beneficial ownership.
 
As a result, Mr. Fu may be deemed the beneficial owner of 11,065,656 shares of Common Stock or approximately 28.9% of the Common Stock outstanding.
 
Item 6.         Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Company.
 
The information set forth in this Item 6 shall be deemed to supplement Item 6 of the March Schedule 13D/A and amend and restate in its entirety Item 6 of the 2011 November Schedule 13D/A.

Items 3 and 4 of this Schedule 13D/A are incorporated herein by reference.
 
Item 7.         Material to Be Filed as Exhibits
 
The following are filed herewith as Exhibits to this Schedule 13D/A:
 
 
Exhibit 7.01
Joint Filing Agreement by and among the Reporting Persons, dated November 21, 2011
 
 
Exhibit 7.02
Firm Offer Letter to the Special Committee of the Board of Directors of Fushi Copperweld, Inc., dated November 17, 2011
 
 
Exhibit 7.03
Financing Commitment Letter by and between Abax Global Capital and Green Dynasty Limited, dated November 17, 20l1
 
 
 
 
 
 
SIGNATURE
 
After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this Schedule 13D/A is true, complete and correct.
 
Dated: 
November ­21, 2011

 
Li Fu
  
       
 
 
  /s/ Li Fu  
  Name: Li Fu  
       
 
 
Wise Sun Investments Ltd.
  
       
 
By:
  /s/ Li Fu  
  Name: Li Fu  
  Title: Director  
       
 
 
ABAX LOTUS LTD.
  
       
 
By:
  /s/ Xiang Dong Yang  
  Name:Xiang Dong Yang  
  Title: Director  
       
 
 
ABAX GLOBAL CAPITAL
  
       
 
By:
  /s/ Xiang Dong Yang  
  Name:Xiang Dong Yang  
  Title: Director  
       
 
 
ABAX GLOBAL CAPITAL (HONG KONG) LIMITED
  
       
 
By:
  /s/ Xiang Dong Yang  
  Name:Xiang Dong Yang  
  Title: Director  
       
 
 
XIANG DONG YANG
  
       
 
 
  /s/ Xiang Dong Yang  
 
Name: Xiang Dong Yang
  
       
 
 
 
 
 
 EX-7.01 2 v241342_ex7-01.htm EXHIBIT 7.01 Unassociated Document
EXHIBIT 7.01
 
AGREEMENT OF JOINT FILING

The parties listed below agree that the Schedule 13D/A to which this agreement is attached as an exhibit, and all further amendments thereto, shall be filed on behalf of each of them.  This Agreement is intended to satisfy Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
 

 
Li Fu
  
       
 
 
  /s/ Li Fu  
  Name: Li Fu  
       
 
 
Wise Sun Investments Ltd.
  
       
 
By:
  /s/ Li Fu  
  Name: Li Fu  
  Title: Director  
       
 
 
ABAX LOTUS LTD.
  
       
 
By:
  /s/ Xiang Dong Yang  
  Name:Xiang Dong Yang  
  Title: Director  
       
 
 
ABAX GLOBAL CAPITAL
  
       
 
By:
  /s/ Xiang Dong Yang  
  Name:Xiang Dong Yang  
  Title: Director  
       
 
 
ABAX GLOBAL CAPITAL (HONG KONG) LIMITED
  
       
 
By:
  /s/ Xiang Dong Yang  
  Name:Xiang Dong Yang  
  Title: Director  
       
 
 
XIANG DONG YANG
  
       
 
 
  /s/ Xiang Dong Yang  
 
Name: Xiang Dong Yang
  
       
 
 
 
 
EX-7.02 3 v241342_ex7-02.htm EXHIBIT 7.02 Unassociated Document
LI FU
ABAX GLOBAL CAPITAL
 
November 17, 2011


STRICTLY CONFIDENTIAL

By Email (via BAML)

Special Committee of the Board of Directors
Fushi Copperweld, Inc.
TYG Center Tower B, Suite 2601
Dongsanhuan Bei Lu, Bing 2
Beijing, 100027, China
 
  

Re: Firm Offer for Fushi Copperweld, Inc. (the “Company”)

Dear Members of the Special Committee:

We are pleased to submit this firm offer (“Offer”) to acquire all of the outstanding shares of common stock of the Company not currently owned by Mr. Li Fu and his affiliates (“Mr. Fu”) and the investment funds managed, advised and/or appointed by Abax Global Capital and its affiliated management companies (“Abax”) by Green Dynasty Limited (“Bidco”), a special purpose vehicle formed to effect the proposed going private transaction (the “Transaction”).

We very much appreciate the time spent and efforts made by the Company and its advisors to facilitate our due diligence and respond to our information requests and while we understand the Special Committee’s frustration about the pace of the process, we would like to highlight the fact that (i) the Company restated its financials on 4 April 2011, (ii) there was significant delay in getting us key due diligence information, (iii) the bank approval process in China is lengthy and different than what you may be familiar with, and unfortunately there is little one can do to expedite the process and (iv) credit markets generally have tightened, especially for leveraged finance by the global banks, which left us with limited options.

Please note that for the benefit of the Special Committee and the shareholders of the Company, we have endeavored to remove all conditionality from this Offer.  We expect that the Special Committee will give prompt consideration to this Offer and we are prepared to execute a binding agreement on an expedited basis following your consideration and to consummate the Transaction as outlined in this letter.

This Offer is subject to the Special Committee confirming its acceptance of this Offer by 5.00 p.m. (Hong Kong time) on 2 December 2011.  If the Special Committee does not confirm its acceptance of our Offer by the time indicated above, this Offer will terminate and have no force or effect.
 
 
 
 

Acquisition Price

Our offer price (the “Offer Price”) is US$9.25 per share in cash for each outstanding share of common stock of the Company not currently owned by Mr. Fu and Abax, subject to the terms and conditions set forth in the Merger Agreement (the “Merger Agreement”) enclosed herewith.

We believe that the Offer Price provides an attractive alternative to the Company’s shareholders.  In particular, the Offer Price represents a premium of 18% to the Company’s last closing price on 16 November 2011 and a premium of 42.8% to the volume-weighted average price (“VWAP”) for the last three months, and a premium of 44.9% to the VWAP of the last six months.

Our Offer Price has been revised down from the initial offer price of $11.50 first indicated to the Board on November 3, 2010, due to several factors, including the following:

 
1.
The Company has produced weaker than projected earnings in respect of both annual 2010 and first nine months of 2011.  On a comparative quarter-on-quarter basis, the Company’s diluted earnings per share are lower by 30.8% in Q1 2011, 12.5% in Q2 2011 and 32.4% in Q3 2011.  On a cumulative basis, the Company’s diluted earnings per share are lower by 25.8% as compared to the same nine-month period (Q1 to Q3) in 2010.  Furthermore, the Company has recently revised its full year 2011 earnings guidance downwards in excess of 20% as announced in the Company’s statements made while discussing Q3 results.
 
 
2.
The Company faces increasingly challenging macro-economic trends, which cloud future prospects of the company’s business operations.  These trends include lower global economic growth, weaker commodity (and particularly copper) prices and slower roll-out of 3G networks in China.
 
 
3.
We have had to make downward adjustments in our valuation of the Company based on our due diligence findings, particularly in relation to the VIE structure and the projected costs of eliminating such structure post-privatization, which we estimate could be as high as $129 million or $3.37 per share.
 
 
4.
As noted above, the general deterioration in the global credit market, driven by the European debt crisis and macro tightening in China credit over the past year, has impacted the ability to raise the quanta of debt anticipated by our November 2010 letter, which has a negative effect on our valuation.

 
5.
A much weakened global equity market.  The Company’s share price has fallen dramatically since last November to as low as $4.06, even with investors having the benefit of the transparency regarding the November 2010 letter of intent.
 
 
 
 
 
Financing Sources

We expect that the total amount of funds needed to complete the Transaction will be approximately US$250 million.  We intend to fund the Transaction through a combination of:

 
1.
the proceeds from a term loan facility (the “Loan”) in the amount of US$200 million from China Development Bank (“CDB”).  Bidco has obtained an unsigned, draft copy of an initial commitment letter for the Loan from CDB, a copy of which is enclosed herewith.  We understand that a formal Commitment Letter will be issued to us in the next two weeks pending completion of CDB’s internal approval procedures.  Upon receipt of the letter, we will promptly deliver it to you.  We expect this letter to be substantially similar to the form enclosed herewith; and
 
 
2.
the proceeds from equity investment and mezzanine debt financings in the aggregate amount of US$50 million from certain investment funds managed, advised and/or appointed by Abax. Bidco has obtained a commitment letter from Abax, a copy of which is enclosed herewith.

Merger Agreement

We have enclosed a mark-up to the Merger Agreement, the Voting Agreement and the Limited Guarantee that we are prepared to execute.

We applaud your sensible decision to remove the requirement of a post-signing go shop period in light of the extensive market canvas conducted by your advisors in the past year.  We have taken a commercial approach to the drafts and our changes have been limited to those that we consider commercially appropriate or otherwise customary for a transaction of this type.

Completion of Due Diligence

We have completed our due diligence investigations of the Company.  As mentioned above, our Offer Price takes into consideration all key due diligence findings.

Required Approvals

The investment committee of Abax has approved the submission of this Offer.  No further internal approvals are outstanding for this Offer.

Key Contacts

We have attached to this letter a list of contacts for us, and our financial and legal advisors.

Confirmation of Preparedness to Sign

We continue to be extremely enthusiastic about this Transaction and believe that the Transaction will provide superior value to the Company’s shareholders.  You should be assured that we are fully committed to moving very quickly towards signing a mutually agreeable Merger Agreement following the Special Committee’s review of our Offer.
 
 
 
 

Should you have any questions on this letter, please do not hesitate to call or email either of us.  We look forward to hearing from you.

Yours sincerely,
 
 
Abax Global Capital
  
Mr. Li Fu
By: /s/ Donald Yang      
  
/s/ Li Fu         
Name: Donald Yang
    
Title: Managing Partner
    
 
 
 
 
EX-7.03 4 v241342_ex7-03.htm EXHIBIT 7.03 Unassociated Document
COMMITMENT LETTER

17 November 2011

To:
Green Dynasty Limited
 
c/o Offshore Incorporations (Cayman) Limited
 
Scotia Centre, 4th Floor
 
P.O. Box 2804, George Town
 
Grand Cayman KY1-1112
 
Cayman Islands

Re:           Abax Financing Commitment
 
Ladies and Gentlemen:
 
This letter agreement sets forth the commitments of funds managed, advised, and/or appointed by Abax Global Capital and its affiliated management entities (the “Sponsor” or “Abax”), subject to the terms and conditions contained herein (including the terms and conditions set forth in Exhibit A attached hereto), to purchase (a) certain equity interests of Green Dynasty Limited, a Cayman Islands exempted company (“Parent”), and (b) Notes issued by the Parent (the “Notes”) in an aggregate original principal amount equal to $25,000,000 and warrants issued by Parent (the “Warrants”) as set forth in Exhibit A.  It is contemplated that, pursuant to an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”) to be entered into by and among Fushi Copperweld, Inc., a Nevada corporation (the “Company”), Parent and a direct wholly-owned subsidiary of Parent to be organized under Nevada law (“Merger Sub”), Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a direct wholly-owned subsidiary of Parent.
 
1. Commitment.  

(a)  Sponsor hereby commits, subject to the terms and conditions set forth herein, that, simultaneous with the closing of the Merger (the “Closing”), it shall (x) purchase, or shall cause the purchase of, equity interests of Parent for an aggregate amount equal to $25,000,000 (the “Equity Commitment”), and (y) cause Parent, upon receipt of the Equity Commitment, to purchase equity interests of Merger Sub for an aggregate amount equal to the Equity Commitment, in each case, solely for the purpose of Parent and/or Merger Sub funding, and to the extent necessary to fund, a portion of the aggregate Merger consideration pursuant to and in accordance with the Merger Agreement, together with related expenses.

(b)  Sponsor hereby commits, subject to the terms and conditions set forth herein (including the terms and conditions set forth in Exhibit A attached hereto), that, simultaneous with the Closing, it shall purchase, or shall cause the purchase of, the Notes in an aggregate original principal amount equal to $25,000,000 and Warrants as set forth in Exhibit A (the “Mezz Commitment” and, together with the Equity Commitment, the “Commitment”) solely for the purpose of Parent and/or Merger Sub funding, and to the extent necessary to fund, a portion of the aggregate Merger consideration pursuant to and in accordance with the Merger Agreement, together with related expenses.
 
 
 
 

(c)           Sponsor may effect the funding of the Commitment directly or indirectly through one or more affiliates of the Sponsor or any other investment fund advised, managed and/or appointed by Abax.  The Sponsor will not be under any obligation under any circumstances to contribute more than the Commitment to Parent and/or Merger Sub.  Parent, in its sole discretion, may reallocate from time to time prior to the Closing, in whole or in part, the aggregate Commitment between the Equity Commitment and the Mezz Commitment.  The amount of the aggregate Commitment to be funded under this letter agreement simultaneous with the Closing may be reduced in an amount specified by Parent, and such reduction may be allocated between the Equity Commitment and the Mezz Commitment by Parent in its sole discretion, but only to the extent that it will be possible for Parent and Merger Sub to consummate the transactions contemplated by the Merger Agreement with Sponsor contributing less than the full amount of the Commitment.
 
2. Conditions.  The Commitment shall be subject to (a) the execution and delivery of the Merger Agreement (in form and substance acceptable to the Sponsor) by the Company, (b) the satisfaction or waiver at the Closing of each of the conditions to Parent’s and Merger Sub’s obligations to consummate the transactions contemplated by the Merger Agreement, (c) the contemporaneous consummation of the Closing, (d) the contemporaneous funding of the debt financing for the Merger on the terms and conditions described in the commitment letters issued by the relevant lenders, (e) the execution and delivery of the definitive documentation for the Notes in form and substance satisfactory to Sponsor and satisfaction of the conditions set forth therein (including, without limitation, the execution and delivery of opinions, certificates, corporate authorizations, intercreditor agreement and security agreements) and (f) receipt of all appropriate and necessary regulatory and other third party approvals.
 
3. Limited Guarantee.  On or before the execution of the Merger Agreement, the Sponsor will execute and deliver to the Company a limited guarantee related to Parent’s and Merger Sub’s certain payment obligations under the Merger Agreement (the “Limited Guarantee”).  Other than with respect to Retained Claims (as such term will be defined under the Limited Guarantee), the Company’s remedies against the Sponsor under the Limited Guarantee shall be, and are intended to be, the sole and exclusive direct or indirect remedies available to the Company and its affiliates against (i) the Sponsor, Parent or Merger Sub and (ii) any former, current and future equity holders, controlling persons, directors, officers, employees, agents, affiliates, members, managers, general or limited partners or assignees of, the Sponsor, Parent or Merger Sub or any former, current or future stockholder, controlling person, director, officer, employee, general or limited partner, member, manager, affiliate, agent or assignee of any of the foregoing (those persons and entities described in clause (ii) each being referred to as a “Non-Recourse Party”) in respect of any liabilities or obligations arising under, or in connection with, this letter agreement or the Merger Agreement and the transactions contemplated thereby, including in the event Parent or Merger Sub breaches its obligations under the Merger Agreement, whether or not Parent’s or Merger Sub’s breach is caused by Sponsor’s breach of its obligations under this letter agreement.
 
 
 
 
 
4. Enforceability.  This letter agreement may only be enforced by Parent.  Parent’s creditors shall not have the right to enforce this letter agreement or to cause Parent to enforce this letter agreement.
 
5. No Modification; Entire Agreement.  This letter agreement may not be amended or otherwise modified without the prior written consent of Parent and Sponsor.  Together with the Merger Agreement and the Limited Guarantee, this letter agreement constitutes the sole agreement, and supersedes all prior agreements, understandings and statements, written or oral, between, the Sponsor or any of its affiliates, on the one hand, and Parent or any of its affiliates, on the other, with respect to the transactions contemplated hereby.  No transfer of any rights or obligations hereunder shall be permitted without the consent of Parent and Sponsor.  Any transfer in violation of the preceding sentence shall be null and void.
 
6. Governing Law; Jurisdiction; Venue.  This letter agreement, and all claims and causes of action arising out of, based upon, or related to this letter agreement or the negotiation, execution or performance hereof, shall be governed by, and construed, interpreted and enforced in accordance with, the laws of the State of New York, without regard to choice or conflict of law principles that would result in the application of any laws other than the laws of the State of New York.  Any legal action, suit or proceeding arising out of, based upon or relating to this letter agreement or the transactions contemplated hereby shall be brought solely and exclusively in the courts of the State of New York sitting in New York City or the federal courts of the United States of America sitting in the Southern District of New York.  Each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of such courts in respect of any legal action, suit or proceeding arising out of, based upon or relating to this letter agreement and the rights and obligations arising hereunder and agrees that it will not bring any action arising out of, based upon or related to this letter agreement in any other court.  Each of the parties hereto hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any legal action, suit or proceeding arising out of, based upon or relating to this letter agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve process as set forth below, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by applicable law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this letter agreement, or the subject matter hereof, may not be enforced in or by such courts.  Each of the parties hereto agrees that notice or the service of process in any action, suit or proceeding arising out of, based upon or relating to this letter agreement or the rights and obligations arising hereunder shall be properly served or delivered if delivered in the manner contemplated by Section 15 hereof.
 
7. Waiver of Jury Trial.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY AND ALL RIGHT SUCH PARTY MAY HAVE TO TRIAL BY JURY IN ANY LEGAL ACTION, SUIT OR PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF, BASED UPON OR RELATING TO THIS LETTER AGREEMENT OR THE NEGOTIATION, EXECUTION OR PERFORMANCE HEREOF.
 
 
 
 
 
8. Counterparts.  This letter agreement may be executed by facsimile and in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
 
9. Third Party Beneficiaries.  This letter agreement shall inure to the benefit of and be binding upon Parent and Sponsor.  Except as provided in the immediately preceding sentence, nothing in this letter agreement, express or implied, is intended to confer upon any person other than Parent and Sponsor any rights or remedies under, or by reason of, or any rights to enforce or cause Parent to enforce, the Commitment or any provisions of this letter agreement or to confer upon any person any rights or remedies against any person other than Sponsor (but only at the direction of Sponsor as contemplated hereby) under or by reason of this letter agreement.
 
10. Termination.  The obligation of Sponsor to fund the Commitment will terminate automatically and immediately upon the earliest to occur of (a) the valid termination of the Merger Agreement in accordance with its terms, (b) the Closing, at which time the obligation will be discharged but subject to the performance of such obligation and (c) the Company or any of its affiliates, directly or indirectly, asserting a claim against the Sponsor or any Non-Recourse Party in connection with this letter agreement, the Merger Agreement, the Limited Guarantee or any of the transactions contemplated hereby or thereby or otherwise relating hereto or thereto, other than the Company asserting any Retained Claim.
 
11. No Recourse.  Notwithstanding anything that may be expressed or implied in this letter agreement or any document or instrument delivered in connection herewith, and notwithstanding the fact that Sponsor may be a partnership or limited liability company, by its acceptance of the benefits of this letter agreement, Parent acknowledges and agrees that no Person other than Sponsor has any obligations hereunder and that no recourse shall be had hereunder, or for any claim based on, in respect of, or by reason of, such obligations or their creation, against, and no personal liability shall attach to, any Non-Recourse Party, through Parent, Merger Sub or otherwise, whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of Parent against any Non-Recourse Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable law, or otherwise.
 
12. Representations and Warranties.  Sponsor hereby represents and warrants to Parent that (a) Sponsor has all limited partnership or other organizational power and authority to execute, deliver and perform this letter agreement; (b) the execution, delivery and performance of this letter agreement by Sponsor has been duly and validly authorized and approved by all necessary limited partnership or other organizational action by it; (c) this letter agreement has been duly and validly executed and delivered by Sponsor and constitutes a valid and legally binding obligation of Sponsor, enforceable against it in accordance with the terms of this letter agreement; (d) the Commitment is less than the maximum amount that Sponsor is permitted to invest in any one portfolio investment pursuant to the terms of its constituent documents or otherwise; and (e) Sponsor has uncalled capital commitments or otherwise has available funds in excess of the Commitment.
 
 
 
 

13.  Assignment.  The Sponsor’s obligation to fund the Commitment may not be assigned, except that the Sponsor may assign all or a portion of its obligations to fund the Commitment to any of the Sponsor’s affiliates or any other investment fund advised, managed and/or appointed by Abax; provided, that, except to the extent otherwise agreed by Parent, any such assignment shall not relieve the Sponsor of its obligations under this letter.  Parent may assign its rights to any of its affiliates or other entity owned directly or indirectly by the beneficial owners of Parent.
 
14. Interpretation.  For the avoidance of doubt, the contribution agreement to be entered into by Parent, Merger Sub, Mr. Li Fu and any other Company officer or director named therein (together with the schedules and exhibits attached thereto, the “Contribution Agreement”), the transactions contemplated therein and any proceeding or claim arising thereunder shall be interpreted as separate and distinct from the Merger Agreement, and the phrases “this letter agreement or the Merger Agreement and the transactions contemplated thereby”; “all prior agreements, understandings and statements, written or oral, between Sponsor or any of its affiliates”; “any document or agreement entered into in connection with the Merger Agreement”; “arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby”; and phrases of similar import shall be interpreted to exclude the Contribution Agreement, the transactions contemplated therein and any proceeding or claim arising thereunder.

15. Notices.  All notices, requests, claims, demands and other communications hereunder shall be in writing (in the English language) and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person or by facsimile, by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified by like notice):

If to Sponsor:

c/o Abax Global Capital (Hong Kong) Limited
Suite 6708, 67/F, Two International Finance Center
8 Finance Street
Central, Hong Kong
Attention: Donald Yang
Facsimile: (852) 3602 1700

with a copy to (which shall not constitute notice):

Weil, Gotshal & Manges
29th Floor, Gloucester Tower
The Landmark, 15 Queen’s Road Central
Hong Kong
Facsimile: (852) 3015-9354
Attention: Akiko Mikumo
 
 
 
 
 
if to Parent, to:

c/o Fushi Copperweld, Inc.
TYG Center Tower B, Suite 2601
Dongsanhuan Bei Lu, Bing 2
Beijing, 100027, PRC
 
Attention: Li Fu
Facsimile: +86 10 8447 8292
 
with a copy to (which shall not constitute notice):
 
Skadden, Arps, Slate, Meagher & Flom
30th Floor, China World Office 2
1 Jianguomenwai Avenue
Beijing 100004, PRC
 
 
Attention: 
Peter X. Huang, Esq.
 
Facsimile: 
+86 10 6535 5577
 
[Signature Page Follows]
 
 
 
 
 
Sincerely,


Abax Global Capital
 
 
By:  /s/  Donald Yang         
Name:  Donald Yang
Title:    Managing Partner
 

Agreed to and accepted:
 
Green Dynasty Limited


By:  /s/ Li Fu            
Name:  Li Fu
Title:    Director