CDC Sells Notes in Private Offering

The software company will sell $168 million of notes and use the proceeds for acquisitions.
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CDC Corp.

(CHINA)

has agreed to sell $168 million of senior convertible notes in a private offering.

The software company will sell the 3.75% senior exchangeable convertible notes due 2011 to a dozen institutional accredited investors.

The senior exchangeable convertible notes carry a 3.75% coupon that is payable quarterly.

When either CDC Software or CDC Games complete an initial public offering, the notes become exchangeable into that company's common shares.

In the event neither CDC Software nor CDC Games completes a qualifying IPO within two years, the notes become convertible into CDC Corp.'s common shares at an initial conversion price of $10.37 a share.

CDC plans to use the proceeds from the private placement for acquisitions at both CDC Software and CDC Games, as well as game development, investment in research and development and for other general corporate purposes, including working capital to support new growth initiatives.

The CDC family of companies includes CDC Software, focused on enterprise software applications and services; CDC Mobile, focused on mobile applications; CDC Games, focused on online games; and China.com, focused on portals for the greater China markets.

Shares of CDC Corp. were up 58 cents, or 8.4%, at $7.41 in recent trading Monday.