Yum China Holdings, Inc. (NYSE:YUMC) Files An 8-K Unregistered Sales of Equity Securities
Item3.02 Unregistered Sales of Equity Securities.
As previously reported, Yum China Holdings, Inc. (the Company) is
party to investment agreements dated September1, 2016 (the
Investment Agreements) with each of Pollos Investment L.P., an
affiliate of Primavera Capital Group (Primavera), and API (Hong
Kong) Investment Limited, an affiliate of Zhejiang Ant Small and
Micro Financial Services Group Co., Ltd. (Ant Financial and,
together with Primavera, the Investors). to the Investment
Agreements, on November1, 2016, the Company issued 17,064,172.74
and 2,080,996.68 shares of common stock (the Closing Shares) to
Primavera and Ant Financial, respectively, subject to adjustment
as described below.
On January9, 2017, following the expiration of the post-closing
measurement period specified in the Investment Agreements, the
Company repurchased from Primavera and Ant Financial 699,394.74
and 85,291.68 shares of Company common stock, respectively, at
par value of $0.01 per share of Company common stock (the
Post-Closing Adjustment).
In addition, on January9, 2017, to the terms of the Investment
Agreements, the Company issued to each of the Investors two
tranches of warrants (together, the Warrants). Upon exercise, the
first tranche of Warrants provide Primavera and Ant Financial
with the right to purchase 7,309,057 and 891,348 shares of
Company common stock, respectively, at an exercise price of
$31.40 per share. The second tranche of Warrants provide
Primavera and Ant Financial with the right to purchase the same
number of shares of Company common stock purchasable by Primavera
and Ant Financial, respectively, under the first tranche of
Warrants, at an exercise price of $39.25 per share. The Warrants
may be exercised at any time or from time to time through
October31, 2021 and contain customary anti-dilution protections.
As a result of the issuance of the Closing Shares and the
Post-Closing Adjustment (excluding shares issuable upon exercise
of the Warrants), Primavera and Ant Financial collectively
beneficially owned approximately 4.8% of the outstanding shares
of Company common stock as of January9, 2017, or approximately
8.7% of the outstanding shares of Company common stock as of
January9, 2017 assuming the full exercise of both tranches of
Warrants by each of the Investors.
The issuance of the Warrants was exempt from registration under
Section4(a)(2) of the Securities Act of 1933, as amended (the
Securities Act). Each of the Investors represented to the Company
that such Investor was an accredited investor and was acquiring
the Warrants for its own account for the purpose of investment
and not with a view to, or for sale in connection with, any
distribution thereof, that such Investor had no present intention
or plan to effect any distribution of the Warrants, and that such
Investor could bear the risks of the investment and afford a
complete loss of its investment. The Investors received written
disclosures that the Warrants had not been registered under the
Securities Act and that any resale must be made to a registration
statement or an available exemption from such registration.
Item9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are provided as
part of this Form 8-K:
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| 10.1 |
Investment Agreement, dated as of September 1, 2016, by and among Yum! Brands, Inc., Yum China Holdings, Inc. and Pollos Investment L.P. (incorporated by reference to Exhibit 10.11 to Amendment No. 5 to Yum China Holdings, Inc.s Registration Statement on Form 10, filed on September 16, 2016). |
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| 10.2 |
Investment Agreement, dated as of September 1, 2016, by and among Yum! Brands, Inc., Yum China Holdings, Inc. and API (Hong Kong) Investment Limited (incorporated by reference to Exhibit 10.12 to Amendment No. 5 to Yum China Holdings, Inc.s Registration Statement on Form 10, filed on September 16, 2016). |
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| 10.3 |
Warrant No. 1 issued to Pollos Investment L.P. on January 9, 2017 |
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| 10.4 |
Warrant No. 2 issued to Pollos Investment L.P. on January 9, 2017 |
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| 10.5 |
Warrant No. 1 issued to API (Hong Kong) Investment Limited on January 9, 2017 |
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| 10.6 |
Warrant No. 2 issued to API (Hong Kong) Investment Limited on January 9, 2017 |
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About Yum China Holdings, Inc. (NYSE:YUMC)
Yum China Holdings, Inc. is a restaurant company with approximately 7,200 restaurants. The Company’s restaurant base consists of restaurant brands, including KFC, Pizza Hut Casual Dining, Pizza Hut Home Service, East Dawning and Little Sheep. The Company’s segments are KFC, Pizza Hut Casual Dining and All Other Segments, which include Pizza Hut Home Service, East Dawning and Little Sheep. KFC is the Quick-Service Restaurant (QSR) brand in China. In addition to original recipe chicken, KFC in China has a menu featuring pork, beef, seafood, rice dishes, fresh vegetables, soups, breakfast, desserts, and many other products, including coffee. Pizza Hut Casual Dining is the Casual Dining Restaurant (CDR) brand. Little Sheep is a casual-dining brand. Little Sheep specializes in Hot Pot cooking. East Dawning is a Chinese food quick-service restaurant brand, primarily located in coastal cities. As of December 31, 2015, KFC operates over 5,000 restaurants in over 1,100 cities across China. Yum China Holdings, Inc. (NYSE:YUMC) Recent Trading Information
Yum China Holdings, Inc. (NYSE:YUMC) closed its last trading session down -0.11 at 26.05 with 1,432,218 shares trading hands.