Zhuhai Zhongfu Announces Share Placement Plan

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• USA - English
• USA - English

HONG KONG and ZHUHAI, China, March 19 /PRNewswire-Asia/ -- China's leading beverage packaging and PET bottling company, Zhuhai Zhongfu Enterprise Holdings Limited ("Zhuhai Zhongfu"; stock code: SZ000659), today announced the details and capital allocation of its non-public share placement plan.

Zhuhai Zhongfu plans to issue 30-79 million shares (both upper and lower limits inclusive) at the issue price of no less than RMB 7.02 per share, and the share placement target is limited to no more than 10 designated investors. It is expected that the fundraising size will not exceed RMB 700 million (excluding fees incurred from share issuance), and the net proceeds will be fully committed to the expansion program of the Company's core businesses, namely the manufacturing of PET bottles, bottle blowing and drink refilling. The detailed expansion program and capital allocation plan are as follows:

    Project        Total        Project details                Expanded
                   investments                                 production
                   (RMB                                        scale
                   million)                                    (per annum)

    Expansion of   Approx.      Establish PET bottle           2,073.6
     PET           435.19       manufacturing bases in         million
     bottle                     Chongqing, Zhuhai, Shenyang,
     production                 Hefei, Beijing, Hangzhou
                                and Tianjin. Funds will be
                                used for acquiring
                                different PET bottling
                                facilities and equipment.

    Expansion of   Approx.      Expand bottle blowing lines    828 million
     bottle        124.10       at Fuzhou, Zhuhai,
     blowing line               Hefei and Chongqing.
                                Funds will be used for
                                acquiring different
                                bottle blowing facilities
                                and equipment.

    Expansion of   Approx.      Expand refilling lines at      576 million
     drink         116.95       Chongqing, Nanning,
     refilling                  Nanchang and Kunshan. Funds
     line                       will be used for acquiring
                                refilling facilities and
                                equipment.

    Enhancement of Approx       Purchase IT equipment and               --
     information   12.00        systems in order to
     system                     upgrade the Company's
                                current information
                                system, optimize its
                                production and marketing
                                process as well as
                                information sharing, and
                                enhance management
                                efficiency.
    TOTAL          Approx.
                   688.24

The Company is committed to this expansion plan. If the final fundraising amount is less than RMB 700 million, it will settle the outstanding portion via other means, such as internal funding and bank borrowings.

Mr. Gary Guernier, Chairman of Zhuhai Zhongfu, said, "Through the share placement plan we aim to institutionalize our core businesses and further enhance our existing production scale and market share, sharpen our competitive strengths in China's beverage packaging industry, improve our profitability, and consolidate our leadership position.

"China's economy is experiencing rapid, persistent growth, and the domestic beverage market is likewise booming, driven by increasing beverage consumption per capita. Meeting this market potential requires additional capacity in plastic packaging for beverages. Diversified product development and demand also provide considerable future opportunities for PET bottle manufacturers.

"Meanwhile, leading overseas beverage giants have been increasing their investments and expansion efforts in China, creating very promising opportunities for our own growth. The capital secured from this share placement will be used to increase our production capacity so as to support our major clients' needs in China, ultimately stabilizing and expanding Zhuhai Zhongfu's market share."

Currently, PET bottles remains the fastest-growing segment with the highest share in China's beverage packaging industry, and it is expanding into various new applications. The rapid growth of the soft drink market has enabled the PET bottle industry to achieve growth of over 15% per annum over the past five years, making it the top performer in plastic packaging for food and beverages.

Mr. Guernier concluded, "We are committed to measures that will facilitate our long-term growth, for example increasing our capacity as well as our product range. We are confident that this will help us and our clients capture opportunities arising from the booming Mainland economy, thriving domestic consumption, and the promising growth of China's beverage and packaging industry. With production expansion and information systems enhancement occurring in various provinces and cities, our operational management will be fully institutionalized and able to improve the product quality and technology of our integrated facilities, leading the modernization and internationalization of China's beverage packaging industry."

Controlling shareholder Asia Bottles (HK) Company Limited, which fully supports Zhuhai Zhongfu's expansion plan, comprises foreign investors and requires regulatory approval to participate. In the best interests of the Company, the controlling shareholder has therefore decided not to subscribe for the share placement. Completion of this share placement will not incur significant changes towards the shareholding structure, although the controlling shareholder's interest will decrease from 29% to 26.01% based on the upper-limit estimate of 79 million shares issued.

About Zhuhai Zhongfu Enterprise Holdings Limited

Zhuhai Zhongfu Enterprise Holdings Limited ("Zhuhai Zhongfu"; stock code: SZ000659) was established in 1982. It is principally engaged in the production and marketing of PET bottling, PVC and OPP labeling, and drink refilling. Zhuhai Zhongfu is one of the largest PET bottle manufacturers in China, and the first company supplying PET bottles to Coca-Cola in China. The Company has over 80 production facilities and an annual production capacity of over 5.5 billion. Its products include PET bottles for carbonated soft drinks, drinking water and beer. It has received various honors and awards at the national and provincial level. The Company was listed on the Shenzhen Stock Exchange (Main Board) in 1996, the first entity in China's beverage packaging industry to be listed. For more details, please visit the Company's website: http://www.zhongfu.com.cn .

    For inquiries, please contact:

    GolinHarris
     Gloria Chiu
     Tel:   +852-2501-7970
     Email: [email protected]

     Madison Wai
     Tel:   +852-2501-7903
            +852-9306-1632
     Email: [email protected]

SOURCE Zhuhai Zhongfu Enterprise Holdings Limited