Major Operating Entity of IT Tech Packaging to Acquire Hebei Tengsheng Paper

IT Tech Packaging, a manufacturer and distributor of diversified paper products in North China, has announced that Hebei Baoding Dongfang Paper Milling Company Limited, the major operating entity of the IT Tech, has entered into an acquisition agreement with Hebei Tengsheng Paper, pursuant to which Dongfang Paper shall acquire 100 percent equity interest in Tengsheng Paper and all right, title and interest in and to all assets owned by Tengsheng Paper. Tengsheng Paper is leasing its land of approximately 50 acres to the company with a lease term of 15 years that expires in November 2027. After the completion of the acquisition, the PM 8 production line will be transferred to Tengsheng Paper which as a wholly-owned subsidiary of Dongfang Paper, will focus on manufacturing and distribution of tissue paper in the future.

Pursuant to the Agreement entered into on June 25, 2019, in consideration for the purchased equity and assets, Dongfang Paper will pay Tengsheng Paper a total of RMB320 million (approximately $47 million) within six months of the execution of the agreement. Further, Dongfang Paper will entrust the existing management of Tengsheng Paper to continue operating the business of Tengsheng Paper and the existing legal representative of Tengsheng Paper will continue acting as the legal representative of Tengsheng. Dongfang Paper will entrust the prior shareholders of Tengsheng Paper to represent it to hold and exercise all shareholder' rights to which it is entitled as the shareholder of Tengsheng Paper.

Zhenyong Liu, chairman and CEO of IT Tech Packaging, comments, "We have had a solid business partnership with Tengsheng Paper since 2012. With land use rights of 761.05 mu, we believe that Tengsheng Paper will offer us ample site and space for our tissue paper production lines. The acquisition of Tengsheng Paper shows our confidence in prospect of the Chinese tissue paper market and we also believe it paves the way for us to further penetrate into the tissue paper market."

Founded in 1996, IT Tech Packaging (ITP), is a leading manufacturer and distributor of diversified paper products in North China. Using recycled paper as its primary raw material (with the exception of its tissue paper products), ITP produces and distributes three categories of paper products: corrugating medium paper, offset printing paper and tissue paper products. With production based in Baoding and Xingtai in North China's Hebei Province, ITP is located strategically close to the Beijing and Tianjin region, home to a growing base of industrial and manufacturing activities and one of the largest markets for paper products consumption in the country. ITP has been listed on the NYSE MKT since December 2009.

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