Keyuan Petrochemicals completes $20.3 million private placement
Keyuan Petrochemicals, Inc. has closed a private placement financing with institutional investors with gross proceeds of $20.3 million to fund the purchase of raw materials for its petrochemical production facility. The lead investor was Prax Capital, a China-focused private equity fund.
The company commenced construction of the first styrene-butadiene-styrene ("SBS") production facility in Ningbo, Zhejiang Province, China, on September 1st. The new SBS facility will be located adjacent to its current production facility and is expected to add 70,000 metric tons to Keyuan's production capacity by the end of 2011. The new facility is anticipated to achieve 80% utilization rate in 2012, the first full year of production, and generate approximately $110 million of sales and $10 million to $11 million of net income in 2012.
"We are delighted to add Prax Capital as a strategic shareholder," said Chungfeng Tao, CEO of Keyuan. "While we have adequate capital to meet our growth plans, the $20.3 million investment gives us supplementary financial flexibility to secure additional raw materials at favorable prices to run through our recently increased production projection of 660,000 metric tons."
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