Packaging

Feihe International, Inc. Announces Redemption Agreement

Thursday 03. February 2011 - Feihe International, Inc. (NYSE: ADY; "Feihe International" or the "Company") (formerly known as American Dairy, Inc.), one of the leading producers and distributors of premium infant formula, milk powder and soybean, rice and walnut products in China, today announced that it has entered into a redemption agreement with Sequoia Capital.

The Company agreed to purchase from Sequoia Capital, and Sequoia Capital agreed to sell to the Company, the 2,625,000 shares that Sequoia Capital acquired from the Company pursuant to its August 2009 financing. The repurchases are scheduled to occur in four equal installments on March 31, 2011, September 30, 2011, December 31, 2011 and March 31, 2012.
Sequoia Capital originally acquired these shares pursuant to a subscription agreement with the Company entered into in August 2009. The subscription agreement granted Sequoia Capital a right to have these shares redeemed if the average of closing prices of the Company’s common stock for the fifteen trading days commencing on the third anniversary of the closing date is less than $39.00 per share.
Mr. Leng You Bin, the Company’s Chairman and Chief Executive Officer, stated, “We are very pleased to have been able to reach an agreement with Sequoia Capital to repurchase its 2,625,000 shares on an accelerated basis. This transaction results in a lower overall cost of capital and provides more flexibility for the Company.”