(Source: PrimeNewswire)
BEIJING, Sept. 17, 2009 (GLOBE NEWSWIRE) -- ChinaCast Education Corporation ("The Company" or "ChinaCast") (Nasdaq:CAST), a leading for-profit, post-secondary education and e-learning services provider in China, today announced the closing of a $19.9 million direct investment with the former minority shareholders of The Foreign Trade and Business College of Chongqing Normal University ("FTBC"). The transaction is expected to be accretive to 2009 financial results.
The Company issued 2.6 million shares of restricted stock at $7.6524 per share, a 20% premium to the twenty day volume weighted average share price (20-Day VWAP) for the period ending September 14, 2009. The shares are subject to a six month lock-up.
On April 21, 2008, ChinaCast Education Corporation completed the acquisition of 80% of FTBC. On August 11, 2009, the Company completed the purchase of the remaining 20% of FTBC from the minority shareholders for $19.9 million in an all cash transaction. Subsequently, the former minority shareholders of FTBC proposed to invest the entire cash proceeds from that sale back into restricted common shares of ChinaCast Education Corporation.
Ron Chan, ChinaCast Chairman and CEO, commented, "We greatly value our relationship with these strategic shareholders as they represent a distinguished group of high level, experienced investors in the post-secondary education sector in China. Their decision to invest the proceeds from the sale of the minority stake in our wholly owned university, FTBC, into restricted shares of our public company at a premium reiterates their long term commitment to ChinaCast and their desire to develop additional M&A opportunities while furthering their relationship with the Ministry of Education. This transaction also provides ChinaCast with an additional $20 million to utilize for working capital and incremental growth opportunities."
About The Foreign Trade and Business College of Chongqing Normal University
FTBC was established by private investors in 2002 as an independent college affiliated with Chongqing Normal University and is located in the southwest city of Chongqing, China's largest municipality in terms of area and population. The college offers four-year bachelor's degree and two-year diploma programs in finance, economics, trade, tourism, advertising, IT, music and foreign languages, all of which are fully accredited by the Ministry of Education. FTBC's campus has over 132 acres of land and 900 faculty and staff.
