ShengdaTech to price $100 million 10-year convertibles to yield 4.5%-5%, up 22.5%-27.5%

By Rebecca Melvin

New York, May 14 - ShengdaTech Inc. plans to price $100 million of 10-year senior convertible notes on May 21, according to a market source.

The notes were talked to yield 4.5% to 5% with an initial conversion premium of 22.5% to 27.5%.

The Rule 144A deal, being sold via bookrunner Oppenheimer & Co., has a greenshoe of $15 million.

The notes are non-callable for three years and are provisionally callable for two years thereafter subject to a 150% hurdle. There is a put after 3.5 years.

ShengdaTech expects to use about $56 million of the proceeds to expand its nano precipitated calcium carbonate, or NPCC, production capacity, while the remaining proceeds will be allocated to potential coal-based chemical acquisitions, strategic investments and to fund working capital.

Based in Tai'an City, Shandong Province, China, the company makes and markets NPCC and coal-based chemicals. The products are used in various applications, including tires and polyvinyl chloride, or PVC, building materials.

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