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Nam Tai Property Announces Hong Kong Arbitrator’s Binding Decision to Dismiss All Claims Brought by Greater Sail Limited
Rhea-AI Impact
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Rhea-AI Summary
Nam Tai Property Inc. (NTPIF) secured a significant legal victory as a Hong Kong arbitrator dismissed a $146.9 million claim from Greater Sail Limited (GSL) and accepted counterclaims from the Company. This ruling enables Nam Tai to potentially access $89 million currently frozen in a Credit Suisse account. The arbitration stemmed from a 2020 PIPE transaction that was previously voided due to improper actions by prior directors. In light of liquidity challenges, Nam Tai is pursuing capital-raising options, including a recent securities agreement that generated $15.4 million from the sale of stocks at $1.75 each. This funding, alongside amendments to a $20 million debt facility, aims to strengthen the Company’s financial position and facilitate ongoing efforts for onshore control over its Chinese subsidiaries.
Positive
Arbitration ruling dismissed claims from GSL, protecting company assets.
Provides path to access $89 million in frozen funds.
Successful capital raise of $15.4 million from stock sale.
Amendments to $20 million debt facility to improve liquidity.
Negative
Access to $89 million in frozen funds is currently uncertain.
Liquidity constraints continue to limit operational effectiveness.
Arbitrator’s Ruling Provides Company a Path to Accessing USD $89 million in Bank Account at Credit Suisse
SHENZHEN, China--(BUSINESS WIRE)--
Nam Tai Property Inc. (OTC Expert Market: NTPIF) (“Nam Tai” or the “Company”) today announced that a Hong Kong arbitrator has dismissed all claims brought by Greater Sail Limited (“GSL”) against the Company for USD $146.9 million under a 2020 private investment in public equity (the “2020 PIPE”) transaction involving the Company and GSL. The arbitrator has also accepted counterclaims brought by Nam Tai against GSL. GSL is a wholly owned subsidiary of Kaisa Group Holdings Limited (“Kaisa”), whose long-standing associates have obstructed the reconstituted Board of Directors’ (the “Board”) efforts to gain on-shore control of Nam Tai’s subsidiaries in mainland China.
The 2020 PIPE took place prior to the election and appointment of the Company’s reconstituted Board in 2021. The 2020 PIPE was voided by the British Virgin Islands Commercial Court in 2020, which found that the prior, Kaisa-dominated Board acted for an improper purpose when initiating the dilutive 2020 PIPE. It was determined that execution of the private placement was a breach of the prior directors’ fiduciary duties and was undertaken to give Kaisa de facto control of the Company in response to a requisition from approximately 40% of the outstanding shares to convene a meeting of the Company’s shareholders to remove and replace the Kaisa-affiliated directors from the Board.
In March 2021, GSL initiated arbitration against Nam Tai in order to compel the Company to remit USD $146.9 million that GSL purportedly paid the Company for 16,051,219 common shares. The arbitrator held a hearing in January 2023 and issued his Partial Award on April 6, 2023. The arbitrator dismissed GSL’s claims for repayment of the USD $146.9 million and accepted counterclaims advanced by the Company. The decision provides Nam Tai a path to accessing USD $89 million that has been frozen in an account within Credit Suisse Group AG. The Company does not yet have access to the funds in this account and cannot accurately estimate at this time when it will be able to access such funds.
The Company was represented in the arbitration by a team led by Jose F. Sanchez, a partner in the International Dispute Resolution & Arbitration practice at Vinson & Elkins LLP, Ogier Group, and Edward Davies KC at Erskine Chambers.
Fundraising and Debt Exchange Transactions
As previously disclosed in Nam Tai’s public filings with the U.S. Securities and Exchange Commission, the Company is involved in various litigation, arbitration and other legal proceedings, including the arbitration described above. Because the reconstituted Board is not in possession of the corporate chops and has limited liquidity, the Company has been focused on potential sources of additional capital to increase its liquidity and strengthen its financial position. The Board spent the past several months working with independent advisors to explore capital-raising options and strategic alternatives that included, but were not limited to, debt, convertible debt, litigation funding, a rights offering and a debt exchange.
After consideration by the Board, Nam Tai entered into a securities purchase agreement on April 5, 2023 with certain accredited investors and institutional shareholders that provided for the sale of 8,821,273 shares of stock at a price of $1.75 per share, for aggregate proceeds of $15,437,228.
After consideration by the Board, on April 5, 2023, Nam Tai also amended the terms of its previously announced USD $20 million debt facility funded by IsZo Capital Management LP and IAT Insurance Group, Inc. Nam Tai agreed to equitize a portion of the principal and capitalized interest, plus all future interest payments, due to the lenders in light of its liquidity constraints.
The Board believed that such securities issuance and debt amendments were in shareholders’ best interests to capitalize the Company, strengthen its financial position, and fund ongoing efforts to gain on-shore control and obtain access to monies within its account at Credit Suisse Group AG. At the time the agreements related to such securities issuance and debt amendments were approved and executed, the arbitrator had not yet issued his Partial Award. On April 7, 2023, after giving effect to the securities issuance and debt amendments, the Company had approximately USD $17.6 million of cash on hand.
Additional detailed information pertaining to the Company’s consummated transactions and other material developments are discussed in more detail in its Report on Form 6-K filed on April 7, 2023.
Forward-Looking Statements
Certain statements included in this announcement, other than statements of historical fact, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “might”, “can”, “could”, “will”, “would”, “anticipate”, “believe”, “continue”, “estimate”, “expect”, “forecast”, “intend”, “plan”, “seek”, or “timetable”. These forward-looking statements, which are subject to risks, uncertainties, and assumptions, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business and the industry in which we operate. Such forward-looking statements include, among other things, statements regarding the anticipated effects of the decision, the Company’s plans and expectations with respect to litigation and regulatory actions in the process to gain on-shore control, its ability to gain on-shore control, and its ability to achieve sustained value for stakeholders. These statements are only predictions based on our current expectations about future events. There are several factors, many beyond our control, which could cause results to differ materially from our expectations, including, among other things, the future actions of Mr. Wang and Ms. Zhang, the Company’s success with respect to its litigation and regulatory actions, other impediments to gaining on-shore control, timing of gaining on-shore control and general market conditions in the real estate sector. Any of these factors could, by itself, or together with one or more other factors, adversely affect our business, results of operations or financial condition. There may also be other factors currently unknown to us, or which have not been described by us, that could cause our results to differ from our expectations. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements apply only as of the date of this announcement; as such, they should not be unduly relied upon as circumstances change. Except as required by law, we are not obligated, and we undertake no obligation, to release publicly any revisions to these forward-looking statements that might reflect events or circumstance occurring after the date of this announcement or those that might reflect the occurrence of unanticipated events.
About Nam Tai Property
Nam Tai Property Inc. is an owner-operator of commercial real estate projects across China. The Company currently maintains two industrial complex projects, with one in Guangming, Shenzhen and one in Bao'an, Shenzhen. Learn more about the Company’s portfolio and strategic priorities by emailing our investor relations team or visiting Weibo: https://weibo.com/u/7755634761
What was the outcome of the arbitration ruling for Nam Tai Property Inc. (NTPIF)?
The arbitration ruling dismissed all claims against Nam Tai from Greater Sail Limited and accepted counterclaims, allowing access to potentially $89 million from Credit Suisse.
How much capital did Nam Tai raise in its recent securities offering?
Nam Tai raised approximately $15.4 million by selling 8,821,273 shares at $1.75 each.
What are the financial implications of the ruling for Nam Tai Property Inc. (NTPIF)?
The ruling allows Nam Tai to pursue access to significant assets and improve its liquidity, although access to the $89 million is not yet available.
What is the significance of the $20 million debt facility amendment for NTPIF?
The amendment to the $20 million debt facility is aimed at enhancing Nam Tai's liquidity by equitizing a portion of the principal and interest payments.
When was the arbitration ruling issued for NTPIF and what was its context?
The arbitrator's ruling was issued on April 6, 2023, concerning claims related to a 2020 PIPE transaction previously voided due to fiduciary breaches.
