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The Ocean Link Consortium Secures Blocking Vote in eHi Car Services Take-private Transaction

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The Ocean Link Consortium Secures Blocking Vote in eHi Car Services Take-private Transaction

PR Newswire

33.2% voting power held by the Ocean Link Consortium in eHi is no longer in dispute

SHANGHAI, Aug. 21, 2018 /PRNewswire/ -- The consortium formed between Ocean Imagination L.P. ("Ocean Link") and Ctrip Investment Holdings Ltd. ("Ctrip", together with "Ocean Link", the "Ocean Link Consortium"), today announced that on August 16, 2018, an arbitrator in Hong Kong has dismissed claims (the "Arbitral Award") made by eHi Car Services Limited ("eHi") and the Crawford Group, Inc., ("Crawford"), against Ocean's affiliate CDH Car Rental Service Limited ("CDH Car"). In this Arbitral Award, the arbitrator has ruled that CDH Car was not required to issue a first offer notice prior to the transfer of shares to Ocean and that, as a result, CDH Car was not in breach of the Investors' Rights Agreement in relation to shares of eHi, dated December 11, 2013 (the "IRA"). The arbitrator also ordered eHi and Crawford to pay CDH Car's costs of the arbitration.

On May 17, 2018, eHi and Crawford submitted a notice of arbitration with the Hong Kong International Arbitration Centre ("HKIAC") against CDH Car, claiming that a purchase agreement between Ocean Link and CDH Venture Partners II, L.P. was in breach of various terms of the IRA, including the right of first offer in the IRA in favor of Ctrip and Crawford.

Now with the HK arbitrator ruling in favor of CDH Car, the voting power of the Ocean Link Consortium is no longer in any dispute. Ocean Link beneficially owns (i) 538,764 Class A Common Shares (including 438,764 Class A Common Shares represented by 219,382 ADSs), and (ii) 8,599,211 Class B Common Shares, which together represent approximately 6.5% of the total outstanding Common Shares of eHi. Ctrip beneficially owns (i) 4,300,000 Class A Common Shares, and (ii) 15,168,193 Class B Common Shares, which together represent approximately 13.9% of the total outstanding Common Shares of eHi. Holders of Class A Common Shares are entitled to one vote per share, while holders of Class B Common Shares are entitled to ten votes per share. Accordingly, the Class A Common Shares and the Class B Common Shares beneficially owned by the Ocean Link Consortium altogether represent approximately 33.2% of the aggregate voting power of the total outstanding Common Shares of eHi.

Ctrip reserves all rights to take legal action against the Ignition transaction

On August 9, 2018, Crawford filed a Schedule 13D/A disclosing that it entered into a Secondary Stock Purchase Agreement with Ignition Growth Capital I, L.P. ("IGC") and Ignition Growth Capital Managing Directors Fund I, L.P. ("IGCMDF", and together with IGC, "Ignition") and the other parties thereto, pursuant to which Crawford purchased all of the shares held by Ignition in eHi. The sale of the Class B Common Shares of eHi by Ignition was structured as a sale of the capital stock of two wholly-owned subsidiaries of Ignition, which allowed the transfer of the Class B Common Shares without a conversion to Class A Common Shares. Ctrip reserves all rights to take legal action against Ignition and Crawford in connection with such sale in order to protect its rights and interests under the IRA.

The Ocean Link Consortium anticipates that the purchase of the shares held by GS Car Rental HK Parallel Limited ("GS HK Parallel") and GS Car Rental HK Limited ("GS HK", and together with GS HK Parallel, "GS") in eHi would likely be effected with Ctrip entering into a securities purchase agreement with GS, pursuant to which at the closing, GS may sell to Ctrip, and Ctrip will purchase 4,632,952 Class B Common Shares for a purchase price per ADS of no less than US$14.50 and an aggregate purchase price of approximately US$33,588,902. Ctrip is in the process of negotiating the securities purchase agreement with GS. If the such GS purchase is consummated, the Class A Common Shares and the Class B Common Shares beneficially owned by the Ocean Link Consortium represent approximately 39.5% of the aggregate voting power of the total outstanding Common Shares of eHi, thus giving the Ocean Link Consortium an even stronger power to block all corporate matters of eHi that requires a special resolution, if such matter is not to the best interest of the Company's shareholders.

The Ocean Link Consortium urges the special committee of eHi to open up due diligence access in support of its superior offer

The Ocean Link Consortium has been working diligently to make meaningful progress after delivering its taking-private proposal, and keeps updating the special committee actively. Despite the Ocean Link Consortium's openness to welcome existing shareholders as well as management shareholders to engage in discussions in support of its superior offer to acquire all of the outstanding Common Shares of eHi, including Common Shares represented by ADSs, for US$15.50 in cash per ADS or US$7.25 in cash per Common Share, neither information access nor substantive feedback was provided by the special committee. The Ocean Link Consortium has re-emphasized its request for due diligence access: "The Ocean Link Consortium clearly stated its willingness to complete customary due diligence in a timely manner in the first proposal to the Board on April 2nd, and repeatedly requested information access in the letters to the special committee dated May 16th, May 24th and June 3rd. We again would like to request the special committee's cooperation in, on a confidential basis, granting members of the Ocean Link Consortium and their representatives full access to the due diligence materials with the scope equivalent to that have been provided to the Chairman Consortium and its representatives."

For more inquiries, please contact info@oceanlp.com.

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SOURCE Ocean Link

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