CHOP- trading @ discount to warrant exercise, decent entry IMO
China Gerui Advanced Materials Group Limited (Nasdaq: CHOP) ("China Gerui" or the "Company"), a leading high precision, ultra-thin, cold-rolled strip steel producer in China, today announced that, as of March 21, 2011, of the 16,066,667 warrants originally issued by the Company in March 2009, 15,514,334 warrants were exercised for proceeds of $77.6 million and 552,333 warrants expired unexercised. The Company has approximately 59.4 million ordinary shares outstanding.
The Company's aforementioned warrants traded under the symbol "CHOPW" and had a $5.00 strike price. The warrants' original expiration date of March 19, 2011 was extended by the Company to March 21, 2011 with a three-day broker protection period. Each properly exercised warrant entitled the warrant holder to one ordinary share of the Company. As previously disclosed, from March 2009 to November 2009, 76,600 of the Company's warrants were exercised. Between November 2009 and the warrants' expiration on March 21, 2011, 15,437,734 warrants were exercised.
Mr. Mingwang Lu, Chairman and Chief Executive Officer, commented, "We believe the expiration and exercise of these warrants removes a level of uncertainty of future dilution that investors faced prior to the expiry and improves our overall capital structure. We plan to use the proceeds received from the warrant exercise for working capital to support our previously announced capacity expansion plans. Our business continues to grow as our high margin, niche precision steel products see increased demand in China. This increase is driven by the rise of the Chinese middle class and their related purchasing power and appetite for products that use our precision steel inputs, such as household appliances, food and beverage packaging (cans, beer bottle caps, etc.), wire and cable, construction decoration and automobile parts, among others."
About China Gerui Advanced Materials Group Limited
China Gerui Advanced Materials Group Limited is a leading niche and high value-added steel processing company in China. The Company produces high-end, high-precision, ultra-thin, high- strength, cold-rolled steel products that are characterized by stringent performance and specification requirements that mandate a high degree of manufacturing and engineering expertise. China Gerui's products are not standardized commodity products. Instead, they are tailored to customers' requirements and subsequently incorporated into products manufactured for various applications. The Company sells its products to domestic Chinese customers in a diverse range of industries, including the food packaging, telecommunication, electrical appliance, and construction materials industries.
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