China XD Plastics (CXDC) Announces Receipt of Non-Binding “Going Private” Proposal

China XD Plastics Company Limited (NASDAQ: CXDC) (the “Company”), one of China’s leading specialty chemical companies engaged in the development, manufacture and sale of polymer composite materials primarily for automotive applications, today announced that its board of directors (the “Board”) has received a preliminary and non-binding proposal letter, dated May 7, 2020, from (i) Mr. Jie Han (“Mr. Han”), the Company’s Chairman and Chief Executive Officer, and (ii) XD. Engineering Plastics Company Limited (together with Mr. Han, the “Buyer Group”), a company incorporated in the British Virgin Islands and wholly owned by Mr. Han, proposing to acquire all of the outstanding shares of common stock (the “Shares”) of the Company not currently owned by the Buyer Group in a “going-private” transaction for US$1.1 per Share in cash, subject to certain conditions. The US$1.1 per Share price represents a premium of approximately 19.6% to the closing price of the Company’s Shares on May 6, 2020, a premium of approximately 19.5% to the average closing price of the Company’s Shares during the last 30 trading days, and a premium of approximately 4.9% to the average closing price of the Company’s Shares during the last 60 trading days.

The Buyer Group currently beneficially owns the Shares representing approximately 70% of the voting power and approximately 50.1% of the share capital of the Company. The Buyer Group has engaged O’Melveny & Myers LLP as its U.S. legal advisor for the proposed transaction. According to the proposal letter, the Buyer Group plans to finance the acquisition with a combination of debt and equity capital. The proposal letter states that the equity portion of the financing would be provided by the Buyer Group in the form of cash and rollover equity in the Company and through available cash at the Company, and that the debt portion of the financing would be provided by loans from third party financial institutions, if required. A copy of the proposal letter is attached hereto as Annex A.

The Company has retained Wilson Sonsini Goodrich & Rosati, Professional Corporation as its U.S. legal counsel in connection with the potential “going-private” transaction contemplated by the proposal letter. Additionally, the Board intends to form a special committee of independent directors (the “Special Committee”) to consider this proposal. The Board expects that the Special Committee will retain independent advisors, including an independent legal and financial advisor, to assist it in its review of the proposed transaction.

The Board cautions the Company’s shareholders and others considering trading the Company’s securities that the Board has just received the proposal letter and has not had an opportunity to carefully review and evaluate the proposal or make any decision with respect to the Company’s response to the proposal. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.

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