Davis Polk is advising Abax Global Capital in connection with a going-private transaction which will result in Nasdaq-listed Harbin Electric, Inc. being taken private by Tech Full Electric Company Limited, an acquisition vehicle that will be owned by the chairman and CEO of Harbin Electric, Mr. Tianfu Yang, certain other members of Harbin Electric's management and Abax Global Capital. In connection with the transaction, each of Harbin Electric's shares of common stock will be converted into the right to receive $24 in cash without interest, except for shares held by Abax Global Capital, Mr. Yang and certain other members of management. The transaction is being financed with a $400 million senior loan facility from China Development Bank, a $25 million term loan from Abax Global Capital, $25 million of warrants and a $38.8 million equity commitment from Abax Global Capital. The transaction is expected to close in the fourth quarter of 2011 and is subject to customary closing conditions, including approval by Harbin Electric's shareholders.
Harbin Electric, headquartered in Harbin, China, is a leading developer and manufacturer of a wide array of electric motors with a focus on innovative, customized and value-added products. Harbin Electric's major product lines include industrial rotary motors, linear motors and specialty micro-motors.
Abax Global Capital is an alternative investment manager with a focus on Greater China and currently manages total assets of approximately $900 million.
The Davis Polk corporate team includes partner Mark J. Lehmkuhler. Partner John D. Paton is providing tax advice. Members of the team are based in the Hong Kong and London offices.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.