MEDIA RELEASE PR37842
Pacific City Financial Corporation Announces Merger With North Asia Investment
Corporation
LOS ANGELES, Jan. 12 /PRNewswire-AsiaNet/ --
Pacific City Financial Corporation (OTC Bulletin Board: PFCF) ("Pac City") and North
Asia Investment Corporation (NYSE Amex: NHR) ("NAIC") today jointly announced that they
have entered into an Agreement and Plan of Reorganization (the "Agreement"), pursuant to
which NAIC will merge with and into Pac City (the "Merger"). Completion of the
transaction is subject to customary conditions, including receipt of all required
regulatory approvals and approval of stockholders of each of Pac City and NAIC.
Pac City is a bank holding company, headquartered in Los Angeles, California, that
conducts its operations through Pacific City Bank, a California state-chartered bank.
As of September 30, 2009, Pac City had total assets of $534 million and total equity of
$54 million, including $16 million of preferred equity under the TARP program. NAIC is
a special purpose acquisition company incorporated in the Cayman Islands with $50
million of cash-in-trust. The senior management of Pac City will remain in their
respective management positions following the Merger. In addition, Thomas C. Kang,
Chief Executive Officer of NAIC, is expected to become Chairman of Pac City's Board of
Directors (the "Board").
Jung Chan Chang, Chief Executive Officer of Pac City, commented, "We are extremely
pleased to announce the proposed transaction, which brings the significant capital base
of NAIC, as well as the board oversight and expertise of Thomas Kang, for the benefit of
Pac City. The management and Board of Directors of Pac City have built a solid
franchise, and we look forward to expanding our platform and enhancing our leadership in
the Korean-American banking sector on behalf of all of our shareholders."
"We are very pleased to announce the proposed merger with Pac City," said Thomas C.
Kang, Chief Executive Officer of NAIC. "NAIC has reviewed approximately 200 potential
transactions, and Pac City stood out as a unique investment opportunity for our
shareholders. Pac City will allow our shareholders to participate in the expected
recovery of the Southern California economy as well as the dynamic Korean-American
banking sector. We believe the capital of NAIC will complement Pac City's strong
management to create a premier bank in Southern California. I am also personally
honored to be a nominee for the Chairman of the combined entity. If elected, I will use
my varied experiences in the financial services industry, both in the U.S. and Korea, to
assist Pac City in its goals of becoming a leading bank and expanding beyond the Korean-
American community."
Under the terms of the Agreement, NAIC shall be merged with and into Pac City, the
separate corporate existence of NAIC shall cease, and Pac City shall continue as the
surviving corporation in the Merger. Shareholders and warrant holders of NAIC
immediately prior to the effective time of the Merger will become shareholders or
warrant holders of Pac City upon consummation of the Merger. In connection with the
Merger, Pac City will issue to the shareholders of NAIC up to a total of 18,461,538
common shares (representing 70.6% of the total Pac City shares to be outstanding after
the Merger) for all of the ordinary shares of NAIC upon closing of the Merger, based
upon an exchange ratio of 3.0769 shares of Pac City common stock for each ordinary share
of NAIC. The final number of Pac City common shares to be issued may be reduced to
reflect any conversions or purchases of public shares by NAIC in connection with the
Merger. Also, the number of Pac City shares to be issued in connection with the Merger
has been reduced to reflect the voluntary conversion of 769,231 Pac City shares that
would have been issued to NAIC's founders in exchange for 250,000 of their NAIC ordinary
shares (representing 20% of the founders' NAIC ordinary shares) into 769,231 Pac City
warrants in order to reduce the number of shares outstanding after the Merger. These
Pac City warrants that will be issued to NAIC's founders will have a strike price of
$3.25 per share of Pac City common stock and be immediately exercisable after the
Merger. In addition, Pac City will issue 22,938,462 warrants to purchase Pac City
common stock with a strike price of $2.44 per share for the 7,455,000 NAIC warrants
outstanding (comprised of the sponsors' warrants and the warrants held by the public)
with a strike price of $7.50 that are callable at $13.75. NAIC's securities will no
longer trade or be outstanding after the consummation of the Merger. Pac City will seek
to have its common stock and warrants listed on the NYSE Amex, which currently lists
NAIC's ordinary shares and warrants, upon consummation of the Merger.
Upon consummation of the Merger, certain of the current directors and executive
officers of Pac City as well as Thomas C. Kang will become subject to a lock-up
agreement that will restrict the sale of any Pac City common shares owned by them for a
period of six months.
Upon the consummation of the Merger, Pac City's Board will be comprised of seven
members, of which a majority will be deemed to be independent as required by the listing
requirements of the NYSE Amex. Pac City will be entitled to designate five directors to
the Board. NAIC will be entitled to designate the Chairman of the Board. It is
expected that Pac City will designate five existing directors of Pac City (including its
CEO) to serve as directors and NAIC has indicated it will designate Thomas C. Kang to
serve as Chairman of the Board, subject to the approval of the shareholders of Pac City
at the meeting of shareholders to be called to vote on the Merger. It is expected that
the nominee for the seventh director of Pac City will be selected jointly by Pac City
and NAIC and will not be a present or former director, officer or employee of either
company. The Board of Pacific City Bank will remain the same.
The consummation of the Merger is subject to the review and the declaration of
effectiveness of the registration statement by the Securities and Exchange Commission
("SEC"), the approval of the Merger by Pac City's shareholders, the approval of the
Merger by NAIC's shareholders, and other customary closing conditions.
Esae Capital Partners, LLC served as financial advisor to Pac City in connection
with the transaction. PGP Capital Advisors, LLC served as financial advisor to NAIC in
connection with the transaction. Stuart Moore is serving as legal counsel for Pac City.
Graubard Miller and White & Case LLP are serving as legal counsel for NAIC.
About Pacific City Financial Corporation
Pac City is a bank holding company, headquartered in Los Angeles, California, that
conducts its operations through Pacific City Bank (the "Bank"), a California state-
chartered bank. The Bank provides a full range of consumer and business banking
services, including accepting deposits into checking and various types of interest-
bearing deposit accounts while also originating a full range of commercial, industrial,
real estate, Small Business Administration and consumer loans. The Bank, founded
initially to meet the banking needs of the Korean-American community, now provides
services to diverse ethnic communities in Southern California through seven branch
offices in Los Angeles and Orange counties. In addition, the Bank maintains four loan
production offices in San Francisco, CA, Dallas, TX, Annandale, VA, and Seattle, WA.
About North Asia Investment Corporation
NAIC is a special purpose acquisition company incorporated in the Cayman Islands.
NAIC was formed to acquire, or acquire control of, one or more operating businesses
through a merger, stock exchange, stock purchase, asset acquisition, reorganization or
other similar business combination. NAIC has neither engaged in any operations nor
generated any revenue to date.
Pac City intends to file a registration statement on Form S-4 that will contain a
proxy statement/prospectus with the SEC, and NAIC intends to file a proxy statement, in
each case that will contain a proxy statement/prospectus to be used in connection with
the Merger. Shareholders of NAIC are urged to read the proxy statement/prospectus when
it becomes available because it will contain important information. Such persons can
also read NAIC's final prospectus, dated July 23, 2008, its annual report on Form 20-F
for the fiscal year ended June 30, 2009 (the "Annual Report", the Form 6-K that NAIC
will file in the next several days which will attach a copy of the Agreement) and other
reports as filed with the SEC, for a description of the security holders of NAIC's
officers and directors and their affiliates and their other respective interests in the
successful consummation of the Merger. The definitive proxy statement/prospectus will
be mailed to shareholders of record as of a record date to be established for voting on
the Merger. Free copies of these documents can also be obtained, when available, at the
NAIC, Pac City and their respective directors and executive officers may be deemed
to be participants in the solicitation of proxies for the special meeting of NAIC's
shareholders to approve the Merger. Information about NAIC's directors and executive
officers is available in its Annual Report. Additionally, the underwriters in NAIC's
initial public offering may assist NAIC in these efforts. The underwriters are entitled
to receive deferred underwriting compensation upon completion of the proposed
transaction. Additional information regarding the interests of potential participants
will be included in the proxy statement and the registration statement and other
materials to be filed by NAIC and Pac City with the SEC.
This press release shall not constitute a solicitation of a proxy, consent or
authorization with respect to any securities or in respect of the Merger.
This press release shall not constitute an offer to sell or the solicitation of an
offer to buy any securities, nor shall there be any sale of securities in any
jurisdictions in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such jurisdiction. No
offering of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1033, as amended.
Forward-Looking Statements
This press release may contain forward-looking statements. Forward-looking
statements are statements that are not historical facts. Such forward-looking
statements, which are based upon the current beliefs and expectations of the management
of Pac City and NAIC, are subject to risks and uncertainties, which could cause actual
results to differ from the forward-looking statements. The following factors, among
others, could cause actual results to differ from those set forth in the forward-looking
statements: changing interpretations of generally accepted accounting principles,
continued compliance with government regulations, changing legislation or regulatory
environments, requirements or changes affecting the business in which Pac City is and
will be engaged, management of rapid growth, intensity of competition, general economic
conditions, as well as other relevant risks detailed in NAIC's filings with the SEC and
the filings to be made by Pac City with the SEC. The information set forth herein
should be read in light of such risks. Neither Pac City nor NAIC assumes any obligation
to update the information contained in this release.
SOURCE Pacific City Financial Corporation
CONTACT: Haeyoung Cho of Pacific City Financial Corporation, +1-213-210-2011; or
Clara Kim of North Asia Investment Corporation, 822 2198 3330
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