IsZo Capital Files Lawsuit Against Nam Tai and the Participants in the Company’s $170 Million Private Placement
October 19 2020 - 9:15AM
Business Wire
Announces it has Filed an Action Seeking to
Invalidate Nam Tai’s Dilutive Private Placement and Secure an Order
Requiring the Company to Convene the Special Meeting Requisitioned
by Holders of ~40% of the Outstanding Shares on September
11th
Highlights That the Court has Granted IsZo’s
Request for an Injunction Designed to Protect Shareholders as the
Legality of the Transaction is Contested
Notes That the Court has Ordered an Initial
Hearing on Monday, October 19th
IsZo Capital Management LP (together with its affiliates,
“IsZo”), a significant long-term shareholder of Nam Tai Property
Inc. (NYSE: NTP) (“Nam Tai” or the “Company”) with beneficial
ownership of approximately 9.9% of the Company’s outstanding
shares,1 today announced that it has taken legal action in the
Eastern Caribbean Supreme Court (the “Court”) against Nam Tai,
Kaisa Group Holdings Limited’s (together with its affiliates,
“Kaisa”) (HKG: 1638) wholly-owned subsidiary Greater Sail Limited
(“Kaisa-Greater Sail”) and West Ridge Investment Company Limited
(“West Ridge”). IsZo’s action comes in response to Nam Tai’s
October 5, 2020 announcement of a $170 million private placement
that distributed more than 16 million common shares to
Kaisa-Greater Sail and more than 2.6 million common shares to West
Ridge, which equated to approximately 47.6% of the Company’s
outstanding shares on a pre-issuance basis. The Court has granted
IsZo’s request for an injunction designed to protect Nam Tai
shareholders, which was promptly served on Nam Tai, Kaisa-Greater
Sail and West Ridge. In addition, the Court has agreed to hold an
initial hearing on Monday, October 19, 2020. In an effort to
continue providing shareholders with transparency into our efforts
at the Company and address many questions we have received
following the announcement of the transaction, IsZo has posted its
statement of claim here.
Nam Tai executed its private placement earlier this month rather
than proceed with convening a meeting of shareholders (the “Special
Meeting”) following IsZo’s delivery on September 11, 2020 of
verified requests from holders of approximately 40% of the
Company’s outstanding shares – a number far in excess of the 30%
threshold required to convene the Special Meeting. The Special
Meeting was requisitioned to provide shareholders the opportunity
to reconstitute the Company’s Kaisa-dominated Board of Directors
(the “Board”) by removing a majority of the incumbent directors and
installing six highly-qualified individuals: Michael Cricenti,
Cindy Chen Delano, Bo Hu, Louis Leung, Paula J. Poskon and Jeffrey
Tuder.
Brian Sheehy, IsZo’s founder and managing partner,
commented:
“IsZo is pleased that the Court has granted our request for an
injunction and quickly scheduled an initial hearing in this
important case. We firmly believe that Nam Tai’s private placement
represents an egregious entrenchment maneuver intended to
strengthen Kaisa’s grip on the Company by preventing a critical
mass of shareholders from achieving boardroom change at the Special
Meeting. We contend that this brazen maneuver has put scores of
investors at risk and contributed to the destruction of
approximately $150 million in shareholder value.2 Our lawsuit aims
to invalidate the transaction and secure an order requiring the
Company to promptly convene the Special Meeting, whereat investors
can vote to remove those directors seemingly serving Kaisa’s
interests and replace them with candidates willing and able to
represent the best interests of all shareholders. IsZo will
continue using every resource at its disposal to provide Nam Tai’s
long-suffering shareholders the opportunity to vote for
sorely-needed change at the Special Meeting.”
Mr. Sheehy added:
“It is important to stress that IsZo firmly rejects Nam Tai’s
claim that it needed to raise new capital in order to address
alleged concerns of lenders regarding a potential change in control
of the Board. It is standard practice across the global real estate
sector for loans to be secured by physical assets or properties,
effectively providing lenders with valuable collateral and security
amidst leadership changes and transformative events. Nam Tai has
also repeatedly touted its stable financial position and cash flows
in public communications in recent months, making it all the more
apparent that the true impetus for the private placement was
Kaisa’s desire to retain control of the Company in the face of
widespread shareholder discontent. We question why respected global
advisory firms such as Houlihan Lokey and Latham & Watkins
would advise Nam Tai on its execution of this value-destructive
transaction that could irreparably harm investors if not
invalidated.”
***
Shareholders interested in learning more about
IsZo’s action and the overall Special Meeting process should
contact our solicitor, Saratoga Proxy Consulting, at
info@saratogaproxy.com or (212) 257-1311. We also encourage
shareholders to learn more about our slate and its strategic vision
by visiting www.FixNTP.com.
***
1 Based on the number of shares outstanding immediately prior to
the disputed private placement. 2 Nam Tai’s share price was $9.39
at the close of trading on October 2, 2020 (the last trading day
before the announcement of the private placement) and the Company’s
share price was $5.50 at the close of trading on October 15, 2020
(the day IsZo served the injunction on Nam Tai).
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version on businesswire.com: https://www.businesswire.com/news/home/20201019005485/en/
For Investors:
Saratoga Proxy Consulting LLC John Ferguson / Joe Mills,
212-257-1311 jferguson@saratogaproxy.com /
jmills@saratogaproxy.com
For Media:
Profile Greg Marose / Charlotte Kiaie, 347-343-2999
gmarose@profileadvisors.com / ckiaie@profileadvisors.com
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