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Dynex Announces Execution Of Agreement To Sell Majority Stake to Chinese Firm

September 02, 2008 by Jeff Shepard

Dynex Power Inc. announced that the company has entered into a definitive arrangement agreement with Zhuzhou CSR Times Electric Co., Ltd. ("Times Electric") pursuant to which Times Electric will acquire in an all cash transaction 75% of the outstanding common shares of Dynex at a price of $0.55 per common share. These terms are consistent in all material aspects with the terms in the Letter of Intent between the two parties announced on March 31, 2008.

The Board of Directors has unanimously approved the transaction and is unanimously recommending that shareholders vote in favor of the transaction. Dynex’s largest shareholders, Messrs. David Banks and Daniel Owen, both independent directors of Dynex, who between them own approximately 42% of the common shares, have entered into a support agreement under which they have irrevocably undertaken to vote their shares in favor of the transaction. The company announced its intention to immediately call a special meeting of shareholders to formally approve the transaction.

Dr. Paul Taylor, President and Chief Executive Officer of Dynex, said, "I am delighted that we have signed this agreement. Over the past few months we have held detailed and fruitful discussions with the management of Times Electric and during that time we have become highly enthusiastic about the benefits that this transaction will deliver to our operations in Lincoln, UK. The potential of bringing our power module, advanced high power bipolar and R&D capabilities together with Times Electric’s capital resources, manufacturing capability and their large internal requirement for power products, offers great opportunity for the future development of Dynex."

Times Electric has stated its intention to retain the services of the senior management team as well as retain Dynex’s manufacturing plant in Lincoln, England.

Times Electric is a joint stock limited company incorporated in Hunan Province in the People’s Republic of China. Times Electric is described as the leading train-borne electrical system provider and integrator for the railway industry in China. It claims to possess comprehensive capabilities in research and development, design, manufacture, sales and customer service. It is also engaged in developing, manufacturing and selling train power converts, auxiliary power supply equipment and control systems for trains for urban rail systems. In addition, Times Electric designs, manufactures and sells electrical components including power semiconductor devices.

The transaction is to be carried out by way of a statutory plan of arrangement and is subject to the approval of two-thirds of the votes cast by Dynex shareholders at a meeting of shareholders, currently expected to be held on or about the 23rd October 2008, as well as Court approval. The transaction is also subject to certain other customary conditions, including receipt of regulatory approvals which includes maintaining the company’s status as a publicly-listed company on the TSX-V. The proposed transaction is expected to close at the end of October, shortly after the receipt of shareholder and Court approvals.