China Automotive Systems Inc. (CAAS), a power steering components and systems supplier in China, announced that its board of directors has received a preliminary non-binding proposal letter, dated May 14, from its Chairman Hanlin Chen, who plans to acquire all of the outstanding shares of common stock of the company not already beneficially owned for US $5.45 per share of common stock in cash.

Chen and his affiliates currently beneficially own approximately 56.4 percent of the issued and outstanding shares of common stock of the company on a fully diluted and as-converted basis. The proposal is expressly conditioned on approval by a special committee of the board comprised of independent directors and is subject to a non-waivable condition requiring approval by a majority vote of the company’s unaffiliated stockholders.

The board has established a special committee of the board, consisting of Arthur Wong, Robert Tung and Guangxun Xu, to consider the proposal. The Special Committee is empowered to, and will be responsible for, among other things, investigating, evaluating, negotiating and making a recommendation to the board with respect to the proposal. The Special Committee also is empowered to retain its own independent advisers to assist in the evaluation of the proposal and any alternative proposals.