ShengdaTech Raising Cash (SDTH)

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ShengdaTech Inc. (NASDAQ: SDTH) announced that it will plans to offer an aggregate of $100 million of senior convertible notes due 2018, in an offering to qualified institutional buyers under a 144A placement.  Neither the notes nor the underlying shares will be registered in this offering.

The notes will bear interest and be convertible into shares of ShengdaTech’s common stock at terms and a conversion price to be determined at the time of pricing of the offering.

Shengda is a manufacturer of nano precipitated calcium carbonate (NPCC) in the People’s Republic of China and a manufacturer of coal-based chemical products in Tai’an City, Shandong Province. Its NPCC products are used in paper, paints, rubber, plastic, tire, and polyvinyl chloride building materials industries.

The company expects to use approximately $56 million of the net proceeds from the offering of the notes to expand its NPCC production capacity; and it plans to use the remaining proceeds for potential coal-based chemical acquisitions, strategic investments and to fund working capital requirements.

As far as what the $100 million means to the company, its market cap at todays close of $9.31 was $504 million.  Its 52-week trading range is $3.95 to $15.57.

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Jon C. Ogg
May 14, 2008