ShengdaTech greenshoe fully exercised, lifts 6% 10-year convertibles to $115 million

By Devika Patel

Knoxville, Tenn., June 25 - Underwriters for ShengdaTech Inc.'s 6% 10-year convertible senior notes exercised their over-allotment option in full for $15 million more of the notes, increasing the size of the issue to $115 million, the company said in a news release.

As previously reported, ShengdaTech sold the convertibles at par in a Rule 144A deal on May 21, after the market close, via bookrunner Oppenheimer & Co.

The notes had an initial conversion premium of 18% and a conversion price of $9.94, which equals a conversion ratio of 100.6036.

The convertibles are non-callable for three years, then provisionally callable for two years 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, 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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