Travel services company Universal Travel Group, Inc. (OTCBB: UTVG) has closed a $7.11 million financing deal with investors. The private placement financing totaled 4.8 million shares at a purchase price of $1.55 per share.
The money will be used for general corporate development, with specific attention relating to online integration. A news release says investing companies were those familiar with China investment opportunities, including Chinamerica Fund LP, Access America Fund, Pope Investments II LLC, Heller Capital, and Investment Hunter, LLC.
”Given the value of other public travel services providers,” said Christopher Efird of Access America, “we believe that Universal Travel Group is one of the Chinese companies in the space with the most potential to build on its current platform to provide premium services to consumers and build significant franchise value for its shareholders.”
This further interest is on top of a 5-million shares purchase on Aug. 14 from a non-management shareholder by Access America, Chinaamerica, and Pope Investments II.
”After several months of due diligence, including in-depth analysis of the Chinese travel space, we believed this dynamic company was significantly undervalued,” said Beau Johnson of Chinamerica Fund. “We are hopeful that when the investment community at large recognizes that a group of sophisticated institutional investors with successful track records investing in, and supporting Chinese companies have accumulated a meaningful position in UTVG that, over time, shareholder value will rise to intrinsic levels. In addition to acquiring this large block of stock from a single non-management shareholder, we had enough confidence in the Company to place the PIPE financing at a premium to the retail price per share in the open market, something rarely done in our space.”
”We are determined to capture the opportunities presented by the tourism and business travel markets in China and will use the proceeds to fuel our growth initiatives,” said Ms. Jiangping Jiang, Universal Travel Group CEO. ”We are also pleased that such respectable institutional investors have recognized us and placed their confidence in our long-term growth plans.”
In 2007, Universal Travel Group itself completed the acquisitions of Speedy Dragon, specializing in air cargo transportation; Xi’an Golden Net, specializing in travel packaged tours; Shanghai LanBao, specializing in hotel reservation and Foshan Overseas International, a China-based company that handles domestic and international travel inquiries.
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