To issue 6% Convertible Bonds Due 2014
Strengthen Capital Base for Future Expansion
HONG KONG, April 7, 2011 /PR Newswire-Asia/ -- China Lumena New Materials Corp. ("Lumena" or the "Company", HKEx Stock Code: 67), one of the largest thenardite producers* and the world's largest PPS resin producer**, is pleased to announce that the Company has entered into a Subscription Agreement with Stable Investment Corporation ("SIC"), a wholly-owned subsidiary of China Investment Corporation and CITIC Capital China Access Fund Limited ("CITIC Capital"), a private investment fund managed by a subsidiary of CITIC Capital Holdings Limited (the "Subscribers") on 7 April 2011.
Pursuant to the Subscription Agreement, SIC and CITIC Capital have agreed to subscribe and pay for 6% convertible bonds due 2014 (the "Convertible Bonds") in an aggregate principal amount of U.S.$120 million (equivalent to approximately HK$933 million). In addition, the Company has granted the Subscribers an option to subscribe for additional convertible bonds in an aggregate principal amount of up to U.S.$100 million, exercisable during the period commencing on the date of completion of the subscription for the Convertible Bonds and ending on the first anniversary of such date. The Company intends to use the net proceeds for capital expenditure and working capital purposes.
Assuming full conversion of the Convertible Bonds at the initial Conversion Price of HK$ 2.81 per share, the Convertible Bonds will be convertible into approximately 332,063,060 Shares, representing approximately 6.09% of the issued share capital of the Company as at 7 April 2011 and approximately 5.74% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares. Completion of the subscription for the Convertible Bonds is subject to satisfaction and/or waiver of certain conditions including shareholders' approval.
Mr. Zhang Zhigang, Chairman and Executive Director of Lumena said, "The subscription agreement with SIC and CITIC Capital and issue of the Convertible Bonds will provide strong capital support for the development of our key business and capital expenditure for future expansion of Lumena. We will capture the booming opportunities in light of the growing demand for our PPS and thenardite products recently, and will make use of the strengthened capital base to further enhance our market presence and competitiveness."
About China Lumena New Materials Corp.
Lumena focuses its operations on the mining, processing and manufacturing of natural thenardite products, and is one of the largest thenardite producers in the world in terms of production capacity as of 31 December 2010*. Equipped with the world's largest single line production facility, the Company produces high quality thenardite products, including powder thenardite, specialty thenardite and medical thenardite. Lumena operates four captive underground glauberite mines in Dahongshan Mining Area, Guangji Mining Area, Muma Mining Area and Yuegou Mining Area in Sichuan Province. Its reserves are higher than the average grade in China, according to JT Boyd***. In January 2011, Lumena successfully acquired the world's largest PPS resin producer, Sino Polymer New Materials Co., Ltd., expanding downstream business to production, development and sales of PPS resin, PPS compounds and PPS fibre.
| * In terms of production capacity as of December 31, 2010, according to Behre Dolbear, an independent market research consultant |
| ** In terms of production capacity as of December 31, 2009, according to SRI Consulting, an independent research service firm |
| *** John T. Boyd Company, a mining consultant firm |
About China Investment Corporation ("CIC")
CIC is an investment company incorporated under the PRC Company Law and headquartered in Beijing. CIC is operated on a commercial basis, seeking long-term, risk-adjusted financial returns.
About CITIC Capital Holdings Limited ("CITIC Capital Holdings")
Founded in 2002, CITIC Capital Holdings is an alternative investment management and advisory company. The firm manages over USD3.3 billion of capital from a diverse group of international and Chinese investors. Core businesses include Private Equity, Real Estate, Structured Investment and Finance and Asset Management. CITIC Capital Holdings currently employs over 170 staff members throughout its offices in Hong Kong, Shanghai, Beijing, Tokyo and New York.
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Porda Havas International Finance Communications Group
| Ms. Helen Chung | +852 3150 6730 | helen.chung@pordahavas.com | |
| Ms. Sharis Siu | +852 3150 6771 | sharis.siu@pordahavas.com | |
| Ms. Kelly Fung | +852 3150 6763 | kelly.fung@pordahavas.com | |
| Ms. Carmen Cheung | +852 3150 6713 | carmen.cheung@pordahavas.com | |
