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Keyuan completes additional USD3.05m private placement

Keyuan Petrochemicals, a manufacturer and supplier of petrochemical products in China, has completed an additional private equity financing of USD3,049,970 with two investors for a total raise of USD26,204,640, including the financing the company completed on 22 April 2010.

The company plans to use the net proceeds for the expansion of its manufacturing facility which will include a raw material pre-treatment facility, additional storage capacity and an asphalt production facility.

TriPoint Global Equities was the placement agent for the transaction.

As a result of this additional placement, Keyuan now has 50,752,362 shares of common stock issued and outstanding (assuming series M shares are fully converted), 6,738,336 shares of preferred stock outstanding (convertible into the same number of shares of common stock), and warrants outstanding exercisable for an aggregate of 2,215,893 shares of common stock including placement agent warrants.

Established in 2007 and operating through its wholly-owned subsidiary, Keyuan Plastics, the company is located in Ningbo, China. Having commenced production in October 2009, Keyuan’s operations include an annual petrochemical manufacturing capacity of 550,000 metric tons of a variety of petrochemical products, with facilities for the storage and loading of raw materials and finished goods, and a technology that supports the manufacturing process with low raw material costs and high utilisation and yields.

Due to China’s growing demand for refined petrochemical products, attributable to China’s robust economic growth and under-developed domestic supply capacity, customer order requests for 2010 have exceeded the company’s current annual production capacity. Additionally, China’s demand for asphalt has outpaced supply for five consecutive years with total imports of 3.3 million metric tons in 2008. In order to grow Keyuan’s business to meet the increasing market demands, the company plans to expand its manufacturing capacity to include a raw material pre-treatment facility, additional storage capacity and an asphalt production facility.

For fiscal year 2010, the Company expects to generate revenue of approximately USD461.3m and net income of approximately USD36.3m, excluding public company expenses.

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