Business News

The Yucaipa Companies Increase Investment in XFMedia

Wednesday 20. February 2008 - Xinhua Finance Media Limited (''XFMedia'' or ''the Company''; Nasdaq: XFML), a leading media group in China, announced today that it has reached an agreement to issue $30 million in convertible preferred shares to The Yucaipa Companies (''Yucaipa''), an investment firm with holdings in Asia, Europe and the Americas.

Upon this issuance, Yucaipa’s aggregate ownership in XFMedia’s common shares will amount to 12% of total shares outstanding, assuming full conversion of the preferred shares and including Yucaipa’s earlier purchase of $25.7 million in common shares from existing shareholders in September 2007.

”The increased investment from a world-class, long-term investor like Yucaipa is a vote of confidence in both the fundamentals and growth prospects of our Company,” said Ms. Fredy Bush, CEO and Chairman of XFMedia. ”The investment will strengthen our financial position and enable us to better capitalize on the opportunities in China for growth and expansion.”

The conversion price is set at $6.00 per American Depository Share (”ADS”), or $3.00 per common share as each ADS listed on the NASDAQ represents two common shares. The conversion price represents a 31% premium to the closing price on February 15, 2008. The preferred shares will vote on an as-converted basis with the common shares.

Yucaipa will be subject to a one year lock-up period before it can convert the preferred shares into common shares or ADSs. The preferred shares have an annual coupon of 8% payable in cash or stock at the Company’s option. Yucaipa will be entitled to retain one board seat for so long as Yucaipa continues to hold at least 50% of the purchased shares.

Yucaipa is a premier investment firm that has established a record of fostering economic value through the growth and responsible development of companies. Since its founding in 1986, the firm has completed mergers and acquisitions valued at more than $30 billion.