UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES
EXCHANGE ACT OF 1934
Date of
Report: April 23, 2010
Commission
File Number: 001-34395
CHINA
NETWORKS INTERNATIONAL HOLDINGS LTD.
(Exact
name of registrant as specified in its charter)
9 Dong
San Huan Zhong Lu, Suite 1101
Chaoyang
District, Beijing, 100020
People’s
Republic of China
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover Form 20-F or Form 40-F. Form 20-F x Form 40-F
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): Not Applicable
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): Not Applicable
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No x
If “Yes”
marked, indicate below the file number assigned to the registrant in connection
with Rule 12g3-2(b): 82 - ______.
On April 7, 2010, upon receipt of the
written consent of a majority of its shareholders, China Networks International
Holdings, Ltd. (the “Company”) amended and restated the Company’s Memorandum and
Articles of Association (the “Memorandum”). A copy of the amended and
restated Memorandum is attached hereto as Exhibit 99.1.
On April
13, 2010, the Company entered into a Securities Purchase Agreement (the
“Securities Purchase Agreement”), as amended by an Amendatory Agreement dated
April 13, 2010 (the “Amendatory Agreement” and together with the Securities
Purchase Agreement, the “SPA”), with certain accredited investors identified
therein (the “Investors”) and effected the closing whereby the Company sold to
the Investors (the “Offering”) six-year 10% senior secured convertible
debentures in aggregate principal amount of $11,000,000 (the
“Debentures”). The Debentures are convertible into Ordinary
Shares of the Company at a per share conversion price of $1.14. At
any time after the issuance of the Debentures and prior to the maturity date,
the Company has the right to redeem all or part of the Debentures, at a
redemption price equal to the sum of (i) 120% of the principal amount of the
Debenture then outstanding, (ii) accrued but unpaid interest and (iii) all
liquidated damages and other amounts due in respect of the Debenture so long as
certain conditions specified therein are met.
The
Company shall pay interest on the aggregate unconverted and then outstanding
principal amount of the Debentures at the rate of 10% per annum, payable
semi-annually. Interest may be paid in cash and/or Ordinary Shares of
the Company at the sole option of the Company. In addition, 60% of
all dividends received by the Company from its subsidiaries must be used to
repay the outstanding principal on the Debentures.
In
addition to the Debentures, each Investor received 100 Ordinary Shares for every
$173.444 invested in the Offering. Accordingly, an aggregate of
6,342,110 Ordinary Shares were issued to the Investors.
The
proceeds of the Offering, net of expenses, will be utilized by the Company first
for the satisfaction of the obligation of China Networks Media Ltd., the
Company’s wholly-owned subsidiary (“China Media”), to make a $7.17 million
capital contribution to its joint venture, Kunming Taishi Information Cartoon
Co., Ltd., with the remaining proceeds to be used for general working capital
purposes.
Pursuant
to a Security Agreement entered into between the Company and the Investors, the
Debentures will be secured by all of the assets of the Company (the “Security
Agreement”). Pursuant to a Guaranty between the Company, China Media
and the Investors, China Media will guarantee the Debentures. The
Debentures will rank senior in right of payment to all existing and future
indebtedness of the Company.
In
connection with the consummation of the Offering, the Company entered into an
Exchange and Amendatory Agreement (the “Exchange Agreement”) with China Media
and the holders (the “Original Debt Holders) of senior secured notes of China
Media in aggregate principal amount of $25,500,000 (the “Media
Notes”). Pursuant to the Exchange Agreement, the Original Debt
Holders agreed to cancel all existing Media Notes in exchange for the pro rata
issuance of an aggregate of 23,000,000 Ordinary Shares of the Company and
16,000,000 Class A Preferred Shares of the Company. Immediately upon
the consummation of the transactions contemplated by the Exchange Agreement (the
“Exchange Transaction”), all payment obligations of the Company or China Media
under the Media Notes ceased and the Media Notes were terminated.
Each
Class A Preferred Share is convertible to one Ordinary Share, as adjusted for
stock splits, stock combinations, stock dividends and similar events applicable
to all of the Company’s Ordinary Shares. The Class A Preferred Shares are
redeemable at the Company’s option in whole or in part for an aggregate sum of
$16,000,000. Upon satisfaction or conversion of all of the Debentures, the
Company will be required to use 60% of all dividends distributed from the
Company’s off-shore joint ventures towards redemption of the Class A Preferred
Shares. Each Class A Preferred Share is entitled to receive a
dividend, which will accrue at a rate of 5% per annum, and will be payable
semi-annually and in arrears in cash or, at the Company’s option, in Ordinary
Shares of the Company at a 5% discount to the trailing 10-day volume-weighted
average trading price of the Company’s Ordinary Shares on the principal trading
market on which they are quoted, though at no point at a price less than $0.50
per Ordinary Share. The Class A Preferred Shares have a liquidation
preference of an aggregate of $16,000,000 upon the sale or liquidation of the
Company. If the closing price of the Company’s Ordinary Shares on the principal
trading market on which they are quoted is less than $0.50 upon the 24 month
anniversary of the transaction contemplated by the Exchange Agreement, then the
liquidation preference will increase to $21,000,000. The approval of
holders of 70% of the Class A Preferred Shares will be required for any equity
financing in which the Company sells its at a price per share below
$1.00.
Following
the closings of the Offering and the Exchange Transaction, the Company’s total
outstanding capital consists of 41,019,993 Ordinary Shares and 16,000,000 Class
A Preferred Shares.
The
foregoing description of the Securities Purchase Agreement, Amendatory
Agreement, Debentures, Security Agreement, Guaranty and Exchange Agreement, does
not purport to be complete and is qualified in its entirety by reference to the
Securities Purchase Agreement, Amendatory Agreement, Debentures, Security
Agreement, Guaranty and Exchange Agreement, which are filed as
Exhibits 99.2 through 99.7 hereto, respectively, and are incorporated
herein by reference.
The
following is a list of all exhibits filed herewith:
|
Exhibit
No.
|
|
Description
|
|
99.1
|
|
Amended
and Restated Memorandum and Articles of Association
|
|
99.2
|
|
Securities
Purchase Agreement, dated April 13, 2010
|
|
99.3
|
|
Amendatory
Agreement, dated April 13, 2010
|
|
99.4
|
|
Form
of Debenture
|
|
99.5
|
|
Security
Agreement, dated April 13, 2010
|
|
99.6
|
|
Guaranty
dated April 13, 2010
|
|
99.7
|
|
Exchange
and Amendatory Agreement, dated April 13,
2010
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| |
CHINA NETWORKS INTERNATIONAL
HOLDINGS LTD. |
|
| |
|
|
|
|
Date:
April 23, 2010
|
By:
|
/s/ Li
Shuangqing |
|
| |
|
Li
Shuangqing |
|
| |
|
Chairman
and Chief Executive Officer |
|
| |
|
|
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EXHIBIT
INDEX
|
Exhibit
No.
|
|
Description
|
|
99.1
|
|
Amended
and Restated Memorandum and Articles of Association
|
|
99.2
|
|
Securities
Purchase Agreement, dated April 13, 2010
|
|
99.3
|
|
Amendatory
Agreement, dated April 13, 2010
|
|
99.4
|
|
Form
of Debenture
|
|
99.5
|
|
Security
Agreement, dated April 13, 2010
|
|
99.6
|
|
Guaranty
dated April 13, 2010
|
|
99.7
|
|
Exchange
and Amendatory Agreement, dated April 13,
2010
|