KHD Humboldt Wedag International AG

Major Shareholding Notification • Dec 21, 2010

News Details

Ad-hoc | 21 December 2010 20:27

KHD Humboldt Wedag International AG: Strategic Partnership with China-based CATIC

KHD Humboldt Wedag International AG / Key word(s): Capital Increase/Alliance

21.12.2010 20:27

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
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The issuer is solely responsible for the content of this announcement.

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Not for release, distribution or publication, whether directly or
indirectly and whether in whole or in part into or in the United States,
Canada, Australia or Japan or any other jurisdiction in which such release,
publication or distribution would be unlawful.

Cologne, December 21, 2010 - KHD Humboldt Wedag International AG ('KHD'),
one of the world's major suppliers of cement manufacturing equipment, has
concluded a strategic partnership with Beijing (Peoples Republic of China)
based CATIC Beijing Co., Ltd. ('CATIC'), a subsidiary of China's
state-owned AVIC International Holding Corporation. The co-operation
agreement (the 'Co-operation Agreement') was signed today. Together, KHD
and CATIC aim to become a market-leading force for the construction of
cement plants by bidding on a wider range of projects. This includes
especially turnkey projects that have traditionally been awarded to
competing companies, thus giving access to a larger number of projects with
the leading cement producing companies. In addition, the co-operation
includes procurement and the right of KHD to co-invest, together with
CATIC, in both a design and a manufacturing institute in China. KHD expects
that the cooperation will strongly enhance its presence and business in
China - the world's largest cement market, and other countries or regions
as KHD and CATIC see fit.

To strengthen the relation with KHD, and as a condition for the
effectiveness of the Co-operation Agreement, the Parties agreed that Max
Glory Industries Ltd. ('MGI'), a Hong Kong based indirect wholly owned
subsidiary of CATIC shall make a capital investment in KHD and, thereafter,
shall hold 20% in the share capital of KHD.

The capital investment shall be implemented by way of a capital increase of
up to 16,571,276 new no par value ordinary bearer shares from the existing
authorized capital of KHD with statutory subscription rights of the
existing shareholders which is currently expected to be completed no later
than March 08, 2011, subject to satisfaction of certain conditions as set
out therein. For this purpose, KHD and MGI entered today into a
subscription agreement ('Subscription Agreement'). Pursuant to the
Subscription Agreement MGI has agreed, subject to satisfaction of certain
conditions as set out therein, to subscribe for such a number of new shares
from the capital increase from authorized capital that were not subscribed
by shareholders on the basis of their statutory subscription rights and
that will result in a holding of 20% in KHD after implementation of the
capital increase ('Target Holding'). MGI and CATIC agreed that the new
shares issued to MGI will be subject to a lock-in period of 29 months
following the date of registration of implementation of the capital
increase. Once the subscription of the new shares by MGI is completed,
CATIC and MGI agreed further to not acquire, and MGI agreed to procure that
its parent company and its subsidiaries ('CATIC Group') do not acquire, any
additional KHD shares within 12 months if such acquisition would result in
MGI or the CATIC Group holding directly or indirectly more than 29% of the
shares of KHD. Both the lock-in period and the acquisition restriction will
automatically be terminated inter alia in case another person acquiring
more than 20% of the shares of KHD or if a take-over offer would be made.
Further, for the lock-in period, KHD, except with the consent of MGI,
agreed not to issue any shares or securities convertible into securities if
this would result in a dilution of MGI. Further, KHD agreed on certain
non-dilution rules during the lock-in period.

Both the directors and the members of the supervisory board of KHD have
approved the transactions as set out in the Cooperation Agreement and
Subscription Agreement by resolutions dated December 21, 2010, including,
inter alia,

(i) the exclusive cooperation,

(ii) capital increase from authorized capital with statutory subscription
rights for all shareholders by up to EUR 16,571,276 by issue of up to
16,571,276 new no par value ordinary bearer shares with a notional par
value of EUR 1.00 and entitlement to dividends as from Jan. 1, 2010,

(iii) the issue price of the new shares being EUR 4.53 per share

(iv) new shares which will not be subscribed for during the subscription
period will be offered to MGI, whereby the maximum number of shares to be
subscribed by MGI is the Target Holding, provided that sufficient shares
will be available after subscription by shareholders to achieve the Target
Holding

(v) new shares not subscribed for neither by the existing shareholders nor
by MGI will not be offered to any third persons and no over allotment will
occur. The resolutions of the directors and the members of the supervisory
board include the relevant resolutions on the utilization of the authorized
capital, all subject to the approval of a securities prospectus for the
public offering of the new shares in Germany and Luxembourg ('Prospectus')
by the Federal Financial Supervisory Authority (Bundesanstalt für
Finanzdienstleistungsaufsicht, BaFin).

According to the resolutions and the terms of the Subscription Agreement,
the directors will not complete the capital increase if the Target Holding
cannot be achieved or MGI does not subscribe for new shares in an amount
equivalent to the Target Holding, e.g. if the conditions set out in the
Subscription Agreement are not fulfilled. Shareholders are advised that
both the Co-operation Agreement and the Subscription Agreement are subject
to various conditions.

The offer of new shares will consist of a public offering (subscription
offer) in Germany and Luxembourg and, if and where permitted under
applicable securities laws, a private placement to eligible investors in
other jurisdictions. The shares offered in the subscription offer may not
be, directly or indirectly, offered or sold, and the subscription right may
not be, directly or indirectly, exercised or otherwise offered or sold in
any jurisdiction outside Germany unless such offering, sale or exercise is
permitted under applicable laws of the relevant jurisdiction and KHD may
require receipt of satisfactory documentation to that effect. Due to such
restrictions under applicable laws, KHD expects that some or all investors
residing in jurisdictions other than Germany or Luxembourg, including the
United States and Canada, will not be eligible to receive or exercise the
subscription rights in the course of the subscription offer.

Disclaimer
This release is neither an offer to sell nor a solicitation of an offer to
buy or subscribe for any securities and shall not constitute an offer,
solicitation or sale in any jurisdiction in which such offer, solicitation
or sale is unlawful. This release does not constitute or form part of an
offer or solicitation to purchase or subscribe for securities in the United
States. The securities referred to herein may not be sold in the United
States absent registration or an exemption from registration under the US
Securities Act of 1933, as amended. KHD does not intend to register any
portion of the offering of the securities in the United States or to
conduct a public offering of the securities in the United States. Copies of
this announcement should not be made in and may not be distributed or sent
into the United States, Canada, Australia or Japan.

Additonal Information:

ISIN: DE0006578008
German Securities Identification Number (WKN) of the shares: 657800
Trading segment: Regulated market (General Standard) of the Frankfurt Stock
Exchange

KHD Humboldt Wedag International AG
Colonia-Allee 3
51067 Cologne
Germany

Contact:
cometis AG
Ulrich Wiehle
Tel.: +49 (0)611 - 205855-11
Fax: +49 (0)611 - 205855-66
E-Mail: wiehle@cometis.de

21.12.2010 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language: English
Company: KHD Humboldt Wedag International AG
Colonia Allee 3
51067 Köln
Deutschland
Phone: +49 (0)221 6504 1106
Fax: +49 (0)221 6504 1090
E-mail: info@khd.com
Internet: www.khd.com
ISIN: DE0006578008
WKN: 657800
Listed: Regulierter Markt in Frankfurt (General Standard);
Freiverkehr in Berlin

End of Announcement DGAP News-Service

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