WEIFANG, Shandong, China, April 17,
2012 /PRNewswire-Asia-FirstCall/ -- Shengtai Pharmaceutical,
Inc. (OTC Bulletin Board: SGTI) ("Shengtai" or "the Company" or
"We" or "Us"), a manufacturer and distributor in China of glucose and starch as pharmaceutical
raw materials and other starch and glucose products, today
announced that its Board of Directors has received a preliminary,
non-binding proposal from its Chairman and Chief Executive Officer,
Mr. Qingtai Liu ("Mr. Liu"), which stated that Mr. Liu intends to
acquire all of the outstanding shares of the Company's common stock
not currently owned by him and his affiliates in a going private
transaction at a proposed price of $1.65 per share in cash. According to the
proposal letter, the acquisition is intended to be financed with a
combination of debt financing and equity financing. Mr. Liu and his
affiliates currently beneficially own approximately 40.5% of the
Company's common stock. A copy of the text of the proposal letter
to the Board of Directors is set forth below.
The Company's Board of Directors intends to form a special
committee of independent directors to consider this proposal and
any additional proposal that may be made by Mr. Liu and his
affiliates, if any. There can be no assurance that any definitive
offer will be made, that any agreement will be executed or that a
transaction with Mr. Liu or any other transaction will be approved
or consummated.
About Shengtai Pharmaceutical, Inc.
Shengtai Pharmaceutical, Inc. through its wholly owned
subsidiary, Shengtai Holding, Inc. (SHI), and the Chinese operating
company of Weifang Shengtai Pharmaceutical Co., Ltd., is a
manufacturer and distributor in china of glucose and starch
products as pharmaceutical raw materials, other starch products and
other glucose products such as corn meals, food and beverage
glucose and dextrin. For more information about Shengtai
Pharmaceutical, Inc., please visit
http://www.shengtaipharmaceutical.com.
Forward Looking Statements
Certain statements in this press release and oral statements
made by the Company constitute forward-looking statements
concerning the Company's business and products. These statements
include, without limitation, statements regarding our ability to
prepare the Company for growth, the Company's planned capacity
expansion and predictions and guidance relating to the Company's
future financial performance. We have based these forward-looking
statements largely on our current expectations and projections
about future events and financial trends that we believe may affect
our financial condition, results of operations, business strategy
and financial needs, but they involve risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements, which may include, but are not limited
to, such factors as unanticipated changes in product demand
especially in the pharmaceutical industry, pricing and demand
trends for the Company's products, changes to government
regulations, risk associated with operation of the Company's new
facilities, risk associated with large-scale implementation of the
Company's business plan, the ability to attract new customers,
ability to increase its product's applications, cost of raw
materials, downturns in the Chinese economy, and other information
detailed from time to time in the Company's filings and future
filings with the United States Securities and Exchange Commission.
Investors are urged to consider these factors carefully in
evaluating the forward-looking statements herein and are cautioned
not to place undue reliance on such forward-looking statements,
which are qualified in their entirety by this cautionary statement.
The forward-looking statements made herein speak only as of the
date of this press release and the Company undertakes no duty to
update any forward-looking statement to conform the statement to
actual results or changes in the Company's expectations.
For more
information, please contact:
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Shengtai
Pharmaceutical, Inc.
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Investor
Relations
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Tel:
86-536-2188831
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Text of the Proposal
Dear Sirs:
I, Qingtai Liu, am pleased to submit this preliminary
non-binding proposal (the "Proposal") to acquire all of the common
stock of Shengtai Pharmaceutical, Inc. (the "Company") that are not
currently owned by me or my affiliates in a going-private
transaction (the "Acquisition").
I believe that my proposal of $1.65 in cash per share of common stock of the
Company, will provide a very attractive alternative to the
Company's public stockholders. My proposal represents a premium of
approximately 40% to the volume-weighted average closing price
during the last 90 trading days and a premium of approximately 50%
to the Company's closing price on April 17,
2012.
The terms and conditions upon which I am prepared to pursue the
Acquisition are set forth below. I am confident that an Acquisition
can be closed on the basis as outlined in this letter.
1. Purchase Price.
The consideration payable for each share of common stock of the
Company (other than those held by me and my affiliates) will be
$1.65 in cash.
2. Financing.
I intend to finance the Transaction with a combination of debt
and equity capital.
At this time there is no arrangement whatsoever with any
stockholder of the Company or potential source of debt or equity
financing for the Acquisition, and I do not propose to make any
commitment prior to reaching transaction terms approved by the
board of directors of the Company.
3. Due Diligence.
Parties providing financing will require a timely opportunity to
conduct customary due diligence on the Company. I would like to ask
the board of directors of the Company to accommodate such due
diligence request and approve the provision of confidential
information relating to the Company and its business to possible
sources of equity and debt financing under a customary form of
confidentiality agreement.
4. Definitive Agreements.
I am prepared to negotiate and finalize definitive agreements
(the "Definitive Agreements") providing for the Acquisition and
related transactions very promptly. These documents will provide
for covenants and conditions typical and appropriate for
transactions of this type.
5. Confidentiality.
I and my affiliates intend to jointly and promptly file a
Schedule 13D to disclose this Proposal and my intention as
discussed with the board of directors of the Company. However, I am
sure you will agree that it is in all of our interests to proceed
in a confidential manner, other than as required by law, until
definitive agreements providing for a transaction have been
executed or we have terminated our discussions.
6. Process.
I believe that the Acquisition will provide superior value to
the Company's public stockholders. I recognize that the board of
directors of the Company will evaluate the Proposal independently
before it can make its determination to endorse the Acquisition.
Given my involvement in the proposed Acquisition, I also recognize
that independent members of the Board will proceed to consider the
proposed Acquisition. In considering my offer, you should be aware
that I am interested only in acquiring the common stock of the
Company that I and my affiliates do not already own, and that we do
not intend to sell my stake in the Company to a third party.
7. Advisors.
I am going to retain my legal counsel in connection with the
Proposal and the Acquisition.
8. No Binding Commitment.
This Proposal does not constitute any binding commitment with
respect to the Acquisition or any other transaction. Any commitment
will result only from the execution of Definitive Agreements, and
then will be on the terms provided in such documentation.
In closing, I would like to personally express my sincerity to
work with the board of directors of the Company to bring this
Acquisition to a successful and timely conclusion. Should you have
any questions regarding these matters, please do not hesitate to
contact me.
Sincerely,
/s/ Qingtai Liu
Qingtai Liu
SOURCE Shengtai Pharmaceutical, Inc.