Asia Packaging Group Inc.

Asia Packaging Group Inc.

November 06, 2013 18:23 ET

Asia Packaging Announces Withdrawal of Financial Support from Principals in China and Establishment of Independent Committee

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 6, 2013) - Asia Packaging (TSX VENTURE:APX) ("the Company") announces the Company's Board of Directors has established an independent committee to consider strategic alternatives for the Company. The committee includes: George Dorin, independent director and chairman of the committee and Michael Raymont, independent director.

The Canadian management team have experienced difficulties in obtaining the cooperation of Wenge Hong and Qilin Hong (the principal shareholders and directors of the Company, who are also brothers) with respect to financing the public company expenses. Based on recent communication, the independent committee has come to the conclusion that there will not be funds made available to satisfy the current obligations due to suppliers or to finance the ongoing public company expenses.

The Company confirms that as of June 30, 2013 the consolidated cash position was $8.8 million and the operating businesses were profitable for the previous quarter. However, this cash is held in bank accounts in China at the operating company level, which are controlled by the principal shareholders. The Principal Shareholders have provided limited funding to the Canadian public company bank account, which currently has approximately $50,000. The funding provided to the Canadian bank account has, to date, been in the form of personal advances to the Company, recorded as related party loans in note 12 to the financial statements. As at June 30, 2013 such related party loans from the Principal Shareholders totalled $1.25 million.

The independent committee together with management of the Company will be working to fulfill the Company's obligations under Parts 4 and 5 of Regulation 51-102 respecting Continuous Disclosure Obligations and Regulation 52-109 respecting Certification of Disclosure in Issuers' Annual and Interim Filings.

About Asia Packaging Group Inc.

Asia Packaging Group, through its wholly-owned subsidiaries in the People's Republic of China ("PRC"), is in the business of manufacturing packaging products and services to the food pharmaceutical and retail industries in China. The Company operates a manufacturing plant in City, Jiangxi China where it produces a variety of film and plastic packaging products. With the completion of the acquisition of Yuanxing Packaging earlier this year, the Company has added a bag manufacturing facility located in Fujian Province and sales offices in Guangzhou and Shanghai.

The forward-looking information contained in this news release represents the expectations of the Company as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While the Company may elect to, it does not undertake to update this information at any particular time except as required in accordance with applicable securities legislation.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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