ShengdaTech repurchases $5.2 million in 6% convertibles due 2018

By Devika Patel

Knoxville, Tenn., March 13 - ShengdaTech Inc. said it bought back $5.2 million of its 6% convertible senior notes due 2018 for about $2.5 million, plus accrued interest, in cash.

The notes were bought in a series of privately negotiated transactions executed between Feb. 17 and Feb. 26.

The $115 million in notes were issued in May. In November, the company repurchased a total of $19.75 million of the convertibles for $9.89 million, plus interest, in cash.

The repurchases potentially will reduce the dilution of ShengdaTech's common stock by nearly 2.51 million shares.

"We have taken advantage of current market conditions to repurchase more of our outstanding debt while maintaining adequate cash reserves. This will result in improved profitability from lower interest expense with the added benefit of reducing dilution to our shareholders," the company's president and chief executive officer, Xiangzhi Chen, said in a press release.

"We consider this to be an effective use of our existing cash resources and may consider additional opportunistic repurchases in the future. We believe the aggregate effect of these repurchases increase our shareholder's wealth and return on equity."

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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.