Vision Opportunity China Fund has invested USD2.0m in Silver Pearl Enterprises as part of a USD23.15m financing by private placement.
Simultaneously with Vison’s investment, Silver Pearl has acquired all of the issued and outstanding ordinary shares of Keyuan International Group through a reverse merger.
Keyuan International conducts its business through its wholly-owned subsidiary Keyuan Plastics, which is an independent China-based manufacturer of a wide range of petrochemical products, including BTX aromatics, styrene and propylene.
Keyuan Plastics owns and operates an annual 550,000 metric tonne capacity petrochemical facility in Ningbo, Zhejiang province, which commenced production in October 2009. The net proceeds of the private placement are intended to be used to finance the expansion of that facility to include a raw material pre-treatment facility, additional storage capacity and an asphalt production facility.
As a component of the private placement, Keyuan Plastics’ management entered into a make good provision which includes a performance threshold of USD33m in net income for the current fiscal year, as determined in accordance with GAAP, as adjusted for certain non-cash charges.
In return for its investment, Vision received the following: shares of series A preferred stock convertible into 514,278 of Silver Pearl’s common stock; 57,142 shares of Silver Pearl’s common stock; three year series A warrants to purchase up to 57,142 shares of Silver Pearl’s common stock at an exercise price of USD4.50 per share; and three year series B warrants to purchase up to 57,142 shares of Silver Pearl’s common stock at an exercise price of USD5.25 per share.
