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To: Dale Baker who wrote (61286)	6/20/2008 5:11:25 PM
From: Skywatcher	Respond to of 118717

IMF tells states to plan for the worst ft.com By Krishna Guha in Washington -- Published: March 12 2008 Governments might have to intervene with taxpayers' money to shore up the financial system and prevent a "downward credit spiral" from taking hold, the International Monetary Fund said on Wednesday. John Lipsky, the IMF's first deputy managing director, said: "We must keep all options on the table, including the potential use of public funds to safeguard the financial system." The statement by the senior IMF official marks the second radical policy intervention from the IMF this year. It had previously called on governments to consider using fiscal policy to offset the impact of the credit crisis on growth. Mr Lipsky said: “I fully recognise an appropriate role for public sector intervention after market solutions have been exhausted.” He urged policymakers to “think the unthinkable” and prepare now for what they would do if the worst case scenarios materialised and “low probability but high impact events” threatened to jeopardise global financial stability. He warned of the risk that a “global financial decelerator” could take hold, in which rising defaults and margin calls from lenders triggered forced asset sales, driving down the value of collateral and forcing further forced sales. The IMF deputy managing director’s comments make it clear that the fund is open in principle to the possibility of taxpayer-funded intervention in the market for mortgage securities as well as intervention to save individual banks from bankruptcy. Mr Lipsky warned: “The risks of further escalation of this crisis are rising and decisive policy action will be needed.” He said this crisis was different from recent past crises because both the financial markets and the banking system “have faltered simultaneously”. The first priority had to be to reverse the “spreading strains” in global financial markets and restore the functioning of the financial system in advanced economies. Mr Lipsky said there should be no let up in the pressure on financial institutions to disclose losses but said pressure to deleverage “needs to be kept orderly”. He also urged banks to recapitalise to avoid shrinking their balance sheet. Stressing that this was a global problem – not one confined to the US – he said it would have to be addressed in a “global context”. Mr Lipsky said the “first line of defence” remained monetary policy and interest rates. But monetary policy was “hampered” by problems in the credit markets and “there is a risk of a broader and more intense tightening in credit conditions”. This was why the IMF was making the case that “there is likely to be a role in some countries for stepped-up counter-cyclical macroeconomic policy measures to help support demand”. Fiscal policy was the “second line of defence”. But Mr Lipsky said “macroeconomic policies may not be sufficient to cushion the blow if an extreme event occurs” – making it essential that policymakers prepared for the possible need to intervene.

To: Dale Baker who wrote (61286)	6/20/2008 8:08:46 PM
From: straight life	Read Replies (1) \| Respond to of 118717

ShengdaTech Outlines Plan to Acquire State-owned Chemical Company and Relocate Existing Chemical Operations ShengdaTech Outlines Plan to Acquire State-owned Chemical Company and Relocate Existing Chemical Operations (Stock up 15.86% today with the Dow down 220) TAIAN CITY, Shandong, China, June 20 /Xinhua-PRNewswire-FirstCall/ -- ShengdaTech Inc. (“ShengdaTech” “the Company”) (Nasdaq: SDTH) a leading manufacturer of nano precipitated calcium carbonate (NPCC) in the People’s Republic of China (PRC) and a major manufacturer of coal-based chemical products in Tai’an City, Shandong Province, PRC, today announced that it plans to acquire Jinan Fertilizer Co., Ltd., a nitrogenous fertilizer company based in Jinan, the capital of Shandong Province. The Company intends to relocate its existing coal-based chemical operations to the facilities of the target acquisition, following receipt of a relocation notice for its factory in Tai’an City from the Tai’an City Government on June 16, 2008. The Tai’an City Government, as part of China’s strengthening of environmental law enforcement reform, issued the relocation notice due to the close proximity of ShengdaTech’s coal-based chemical facility to residential and business properties. According to terms of the relocation notice, ShengdaTech must cease operations at its Tai’an City coal-based chemical facility on November 1, 2008 but is permitted to continue operations until October 31, 2008 to ensure a stable transition of its chemical business and employees. As previously disclosed, the Company has been actively searching for strategic acquisition candidates to expand its coal-based chemical business and to serve as a new site for existing operations, including but not limited to acquiring Jinan Fertilizer Co., Ltd. and its subsidiaries. Currently, Jinan Fertilizer Company is being managed by Shandong Shengda Technology Co., Ltd.(“Shengda Group”), an affiliate of the Company, under a restructuring agreement with the local government in order to provide for effective transition of the operations. The transaction will be contingent on the completion of an independent audit and due diligence, and negotiation of the final terms and a definitive agreement, and will be subject to approval by ShengdaTech’s board of directors. The Company expects to complete the acquisition of Jinan Fertilizer Co., Ltd. on or before November 1, 2008. “We are excited about the potential of this acquisition to strengthen our position in the coal-based chemical sector and believe its operations will strongly benefit from ShengdaTech’s proven management and industry experience. We expect this transaction to be significantly accretive to our shareholders within the first year of operations,” said Mr. Xiangzhi Chen, President and CEO of ShengdaTech. “Given the accelerated timeline to relocate our existing chemical operations, we are working to complete the acquisition of Jinan Fertilizer as early as possible in order to minimize any disruption to this business segment.” Jinan Fertilizer and its subsidiaries’ were founded in 1958 as the first state-owned, mid-scale nitrogenous fertilizer enterprise in China. The company’s facilities are located in Jinan City, the capital of Shandong Province, and are in close proximity to the Company’s current headquarters and the existing chemical plant, with access to good rail transportation. Jinan Fertilizer has seven subsidiaries and about 1,800 employees. Its products are sold under the “Quancheng” brand name and include concentrated nitric acid, synthetic ammonia, methanol, fertilizer and carbon dioxide. Jinan Fertilizer also produces compound fertilizer, liquid fertilizer and polywoven sacks. Jinan Fertilizer and its subsidiaries hold a 16% share of the domestic concentrated nitric acid fertilizer market and account for approximately 50% of China’s concentrated nitric acid fertilizer exports, making it the second largest in the industry. Assuming the current market demand continues, the Company estimates that once Jinan Fertilizer achieves full operations in 2009 it could yield an annual sales of approximately three times the current sales of ShengdaTech’s existing chemical business. The gross margin is estimated to be equal or higher than the current chemical business at targeted production levels. The Company is working to determine the full impact, if any, of the acquisition on its expected financial results for the year 2008 and plans to disclose more detailed financial information regarding the acquisition once the audit and business analysis are completed and the board has finalized its review, all of which is expected to be completed in August of 2008. “The Jinan City government has encouraged the Company and its affiliates to acquire and reorganize Jinan Fertilizer and its subsidiaries. The Quancheng brand is a well-known, high-quality name in Shangdong Province and will allow us to gain a strong foothold in the concentrated nitric acid market in China and the export market to Europe and Southeast Asia. We plan to leverage our expertise in converting state-owned enterprises to profitable and efficient operations and to successfully integrate Jinan Fertilizer and its subsidiaries into our operations. In the unlikely event that the acquisition is not completed by the relocation deadline, we plan to use Jinan Fertilizer and its subsidiaries as our outsourced supplier for matching products currently produced in Tai’an City. While we are not able to estimate the precise cost of the relocation at this time, we believe that the local government of Tai’an City will offer us some financial assistance to compensate us for the expense of removing the equipment or any production stoppage that may result. Although settlement and collection from the local government is time-consuming, we hope to receive the compensation from the government and conclude this matter before the end of the year,” concluded Mr. Chen. About ShengdaTech, Inc. ShengdaTech Inc. (“the Company) is engaged in the business of manufacturing, marketing and selling nano precipitated calcium carbonate ("NPCC") and coal-based chemicals for use in various applications. The Company converts limestone into NPCC using proprietary technology. The unique chemical and physical attributes make NPCC a valuable ingredient in tires, paints, polyvinyl chloride ("PVC") building materials and other products. NPCC enhances the durability of many products by increasing strength, heat resistance, and dimension stabilization. The Company is also engaged in the manufacture and sale of coal-based chemical products, namely ammonium bicarbonate, liquid ammonia, methanol and melamine. The Company markets and sells its coal based chemical products mainly for chemical fertilizers and raw materials in the production of organic and inorganic chemical products, including formaldehyde and pesticides. For more information, contact CCG Elite directly or go to ShengdaTech’s website at shengdatechinc.com . Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth above that are not historical facts are forward-looking statements that 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 the ability of the Company to complete the acquisition and relocate its coal based chemical operations ,unanticipated changes in product demand especially in the PVC, polyethylene, and paper industry, changes in composition of these industries, ability to attract new customers, ability to increase our product’s applications, ability of our customers to sell products, cost of raw material, 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. For more information, please contact: Crocker Coulson, President CCG Elite Tel: +1-646-213-1916 Email: crocker.coulson@ccgir.com Web: ccgelite.com