Shareholder Update from CPT GroupDear Shareholder,
Thank you for your continued support of Capital Alliance Group Inc. and its subsidiary companies. Over the past 12 months, a number of significant developments have transpired that we believe will have a positive impact on our company going forward. In December 2004, Harris Nesbitt was officially engaged as the financial adviser for our majority owned subsidiary, CIBT School of Business & Technology Corp. (“CIBT”).
Owned by the Bank of Montreal and Harris Bank, Harris Nesbitt is a top five-ranked investment-banking firm in North America with the #2 ranking on Wall Street in private equity financings last year having completed over US$2.24 billion in private and public equity placements. Their chief investment analyst, Jeff Silber, was rated the #1 investment analyst in the consumer services sector in 2004 according to the Wall Street Journal. Harris Nesbitt will represent CIBT for all future equity investment activities into CIBT.
In addition to this engagement, CIBT, showed a 45% increase in enrollment year over year as of December 31, 2004. In the past year, CIBT purchased Beihai College of Shandong Province, and is awaiting government approval to purchase Zhengzhou International Business School of Henan Province. Shandong Province and Henan Province have a combined population of approximately 200 million people and both provinces are at the center of a new industrial base of Eastern Coastal China. The respective neighboring provinces are comprised of over 400 million inhabitants, which create an expansive and valuable recruiting market for CIBT. These two strategic expansions will undoubtedly bolster the recognition and reputation of CIBT throughout China as an illustrious choice for post-secondary education. In December, 2004 CIBT was proudly recognized as the Top-10 Most Influential Sino-Foreign Joint MBA Programs in China according to the World Executive Weekly magazine.
The second significant development pertains to Capital Alliance Group’s core business strategy of developing and nurturing new enterprises into self-sustaining and profitable companies with the ultimate goal of selling them for a substantial profit. Recently, Capital Alliance Group, through its majority owned subsidiary SE Global Equities Corp. (“SE Global”), agreed to acquire certain assets of China based Sun Media Investment Holdings Limited (“Sun Media”), which will result in a significant change in the business, management and control of SE Global, subject to the necessary approvals.
Founded between 1998 and 1999 by the popular Chinese TV program host Ms. Yang Lan and her husband Dr. Bruno Wu, Sun Media Investment Holdings Ltd. (Sun Media) is currently the number one ranked media investment company in China. According to a recent ranking of China’s media business published by China Business Times magazine, Sun Media was ranked the largest multimedia company in China today with assets of over US$322M and revenue of US$272M. Sun Media Investment Holdings focuses primarily on growth opportunities in media markets in Asia and, particularly in greater China. The company aspires to add value by creating and sustaining branded content platforms, which it can leverage across many different forms of media. Today, Sun Media invests in six key areas of media: television, publishing, sports marketing, education, advertising and financial news. Sun Media has direct interests in 11 media companies, through which it holds shares in more than 30 media operations, controlling no less than 60 media brands in 9 countries and 15 cities.
On January 7, 2005, SE Global entered into an “Engagement Term Sheet” with Sun Media to acquire certain assets held by a subsidiary company of Sun Media (“Sun Subsidiary”). As indicated in SE Global’s joint news release between Sun Media and SE Global, SE Global will acquire US$300M of its assets held by Sun Subsidiary in exchange for 320 million shares of SE Global from treasury. Prior to closing this asset acquisition, SE Global will roll back its issued and outstanding share capital on a 2:1 basis, increase its authorized capital and change its name. In conjunction with this transaction, Capital Alliance Group has agreed to enter into a management contract with SE Global on the close of this transaction to assist the new company for two years in exchange for 250,000 post-consolidated shares as compensation. The parties will also enter into an agreement whereby Capital Alliance will also receive a two year buy back option to purchase SE Global’s existing securities business. Capital Alliance has also agreed to sell to Sun Media 450,000 of its shares of SE Global for an aggregate purchase price of $450,000. Capital Alliance has received a $150,000 cash deposit from Sun Media to secure this share transaction. After the closing of this transaction SE Global will effectively become Sun Media’s flagship vehicle for the US public market. This transaction is scheduled to close on or shortly after March 31, 2005 subject to both parties satisfactorily negotiating and meeting the conditions of all formal agreements and regulatory requirements.
SE Global currently trades for US$2.5 range per share on the OTCBB under the symbol SEGB. Capital Alliance Group owns over 14.5 million shares of SEGB translating to a current market value of approximately US$36 million ($47 million CDN). Capital Alliance Group will likely sell portions of its holding in SEGB over the next three to five years to institutional investors to crystallize on the gain of this investment.
As these tremendous opportunities continue to unfold, 2005 looks to be a very promising year for Capital Alliance Group. We would therefore like to take this opportunity to thank each and every one of our valued Shareholders for their continued support and have attached related news releases and profiles of our partners mentioned in this letter for your review.
Thank you.
Sincerely,
Toby Chu
President and CEO