Packaging

China Shengda Packaging Group Inc. Announces Closing of Underwritten Public Offering of Common Shares

Thursday 16. December 2010 - China Shengda Packaging Group Inc. (Nasdaq: CPGI; the "Company"), a leading Chinese paper packaging manufacturer, today announced it closed its previously announced underwritten public offering of 8,145,631 shares at a price of $4.00 per share.

Of these shares, 8,000,000 were sold by the Company and 145,631 were sold by a selling stockholder. The Company did not receive any proceeds from the sale of shares by the selling stockholder. The total net proceeds of the offering to the Company, after deducting underwriting discounts and commissions and other estimated offering expenses and without giving effect to any exercise of the underwriters’ over-allotment option, were $28.9 million. The Company has granted the underwriters a 30-day option to purchase up to an additional 1,200,000 shares of common stock to cover over-allotments.
The Company intends to use the net proceeds from this offering to pay for part of the acquisition cost for a paper manufacturing company, which the Company expects to cost approximately $40 to $45 million. Any remaining balance may be used, together with cash on hand, cash from operations and/or funds available under the Company’s lines of credit, (i) to acquire one or more paper packaging companies or (ii) for upgrading existing equipment, purchasing new equipment, working capital and general corporate purposes.
Oppenheimer & Co. acted as the sole book-running manager, William Blair & Company acted as the co-lead manager and Brean Murray, Carret & Co. acted as co-manager for the offering.
The shares were issued pursuant to an effective registration statement previously filed with the Securities and Exchange Commission (the “SEC”). Copies of the final prospectus relating to the offering may be obtained on the SEC’s website, www.sec.gov, and by contacting Oppenheimer & Co. Inc., Syndicate Prospectus Department at 300 Madison Ave., 4th Floor New York, New York 10017, or by telephone at 212-667-8563 or email to EquityProspectus@opco.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The offering may only be made by means of a prospectus. This information does not purport to be a complete description of the Company’s shares or the offering.