China Water & Drinks signs agreement for $50M of convertible notes

Leading producer and distributor of bottled water in the People’s Republic of China said it has signed an agreement to raise $50 million through a private placement of convertible notes.

Investors included Goldman Sachs, Liberty Harbor Master Fund I, L.P., The Pinnacle Fund, L.P. and Pinnacle China Fund, L.P., among others. The net proceeds will be used for acquisitions.

“We are extremely pleased with the successful raise of $50 million,” says Xinghua Chen, Chief Executive Officer of China Water & Drinks. “We believe there is a tremendous opportunity for us to expand our market penetration as Chinese consumers are increasingly choosing bottled water as their preferred choice of beverage.”

The convertible notes will bear an interest rate of 5.0% per annum, payable quarterly in arrears beginning March 31, 2008. The note will initially be convertible into shares of China Water and Drinks’ common stock at a conversion price of $4.25 per share.

The convertible notes issued in the private placement have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the US except pursuant to an effective registration statement filed with the Securities and Exchange Commission or pursuant to an applicable exemption from the relevant registration requirements.

The Company has agreed to file a registration statement with the SEC for the resale of the convertible notes sold in the private placement.