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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) September 14, 1998
China Pacific, Inc.
(Exact Name of Registrant as Specified in Charter)
Nevada
(State or Other Jurisdiction of Incorporation)
0-26232 87-0429945
(Commission File Number) (IRS Employer Identification No.)
Chengdu Iron and Steel Plant Office Building, Qingbaijiang District, Chengdu,
Sichuan Province, China, Postcode 610303
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 86-28-330-6590
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On September 14, 1998, Great China Industries Limited, a British Virgin Islands
corporation, purchased 3,271,429 shares of the common stock, par value $0.001,
of China Pacific, Inc. (the "Company") from C.P. Investment Limited, at a price
of $0.276 per share, or $903,225. After the Company's recent 1 for 5 reverse
stock split, which was effective September 28, 1998, this is equivalent to
654,286 post-reverse split shares of the Company's common stock. Great China
Industries Limited, which was not previously a shareholder of the Company, owns
36.19% of the Company's outstanding common stock. The beneficial owner of Great
China Industries Limited is Mr. Thomas Tong, who is the acting President, Chief
Financial Officer, and a director of the Company, as well as a director of
Chengdu Chengkang Iron and Steel Co., Limited, the Company's 60% owned joint
venture subsidiary.
C.P. Investment Limited is a wholly owned subsidiary of China Pacific
Investment Holdings, Ltd. China Pacific Holdings Ltd. is owned 51% by Kui Yin
Investment Co., Ltd., a company controlled by a discretionary trust established
for the benefit of the family of Clement Shui-Tong Mak, formerly the President,
Chief Executive Officer, and Chairman of the Company. The remaining 49%
interest in China Pacific Investment Holdings Ltd. is owned by Guangdong
Construction (BVI) Co., Ltd., which is, in turn, wholly owned by the China
Construction Bank-Guangdong Branch.
The purchase price for the Company's common stock is to be paid by Great China
Industries Limited with HK$700,000 (equivalent to US$90,332.58) in cash, which
was delivered to C.P. Investment Limited on the closing date of the
transaction, September 21, 1998, with the remainder to be paid in a lump sum of
HK$6,300,000 (equivalent to US$812,893.23) which is to be delivered one month
after the closing date. The source of these funds is an unsecured loan to Great
China Industries Limited from Chengdu Row International Limited, a British
Virgin Islands corporation. The loan is a two-year term loan with interest of
eight percent per annum, repayable at the maturity of the loan. Mr.
Tong has agreed to act as guarantor of the obligation of Great China Industries
Limited to pay the purchase price for the Company's common stock.
ITEM 7. EXHIBITS.
Press release dated September 21, 1998.
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 Pacific, Inc.
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(Registrant)
Date October 6, 1998 By: /s/ Thomas Tong
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Thomas Tong
Acting President and Chief
Financial Officer
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EXHIBIT INDEX
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Exhibit No. Description
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99.A Press Release
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Exhibit to Form 8-K Exhibit 99.A
MANAGEMENT BUYOUT
China Pacific, Inc. (NASDAQ-SmallCap-CHNA, Date: September 21, 1998) (the
"Company") today announced that, on September 14, 1998, Great China Industries
Limited purchased 3,271,429 shares of the Company's common stock from C. P.
Investment Limited, at a price of $0.276 per share, or $903,225. The beneficial
owner of Great China Industries Limited is Mr. Thomas Tong, who is the acting
President, Chief Financial Officer, and a director of China Pacific, Inc., as
well as a director of Chengdu Chengkang Iron and Steel Co., Limited ("Chengdu
Steel"), the Company's 60% owned joint venture subsidiary.
Mr. Tong has stated that he is currently evaluating the cost reduction program
and a restructuring of the China Pacific group companies, with the goal of
mitigating the Company's financial burden.
A new team will carry on the negotiations with the holders of the Company's
approximately $15.0 million in 9% convertible notes (the "Notes"), regarding the
terms of the Notes. Although the outcome is still not certain, Mr.
Tong hopes that a satisfactory agreement can be reached.
China Pacific, Inc. is a leading producer of steel and iron products in Sichuan
Province, the People's Republic of China, through its majority interest in
Chengdu Steel.
Additional corporate information and press releases are available at the
Company's web site www.chinapacific.com, or contact:
China Pacific, Inc. -- Los Angeles, CA office,
Tel: (562) 433-1882
