Wescast Industries Inc. has entered into a Memorandum of Understanding to have its capital acquired by Sichuan Bohong Industry Co., Ltd. of China. The proposed transaction pursuant to which Bohong would acquire, by way of a plan of arrangement under the Business Corporations Act (Ontario), would see 100% of the issued and outstanding capital of Wescast acquired at an expected price of approximately $13.60 per share in cash, based on (and subject to adjustment on account of changes to) Wescast’s expected transaction expenses and currently outstanding shares and share-based payment obligations on a fully diluted basis. The acquisition would be subject to a number of closing conditions, including approval of Wescast’s shareholders, the Ontario Superior Court of Justice and regulatory authorities of competent jurisdiction. Bohong has advised Wescast that it has completed its due diligence and, as a sign of good faith to complete the acquisition, has agreed to provide to Wescast a deposit of $2.0 million. In order to complete the acquisition, Bohong has advised that it will need to obtain committed financing from the China Development Bank. The MOU contains an exclusivity period until December 30, 2011 for the purposes of Bohong obtaining such financing and the parties negotiating a definitive arrangement agreement. The exclusivity period could be extended by Bohong until January 31, 2011 upon payment of a second deposit of $5.0 million and until February 29, 2012 upon payment of a third deposit of $5.0 million for total deposits of up to $12.0 million. Wescast has agreed that it shall not enter into any agreement to effect an acquisition of all or a majority of the shares of Wescast with any person or entity other than Bohong during the exclusivity period subject to the exercise by the Wescast board of directors of its fiduciary duties to accept a bona fide superior offer. If the Wescast board of directors so exercises its fiduciary duties, then Wescast shall refund all deposits paid by Bohong under the MOU and pay to Bohong an amount of C$2 million or, if the second deposit is paid, C$4 million or, if the third deposit is paid, C$6 million for the reimbursement of Bohong’s costs and expenses. The deposits are also refundable in certain other circumstances.