Asia Packaging Signs Letter of Intent to Acquire Yuanxing Packaging

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 7, 2012) - Asia Packaging Group Inc. (TSX VENTURE:APX) (the "Company") is pleased to announce that it has entered into a letter of intent (the "LOI") relating to the potential acquisition (the "Acquisition") of Yuanxing Holdings (Hong Kong) Ltd. ("Yuanxing HK"), which is a holding company that holds all of the issued and outstanding share capital of Yuanxing Package (China) Co. Ltd. ("Yuanxing China"), as well as its related company, Yuanxing Package (Suzhou) Co., Ltd. ("Yuanxing Suzhou") (Yuanxing HK, Yuanxing China, and Yuanxing Suzhou are referred to collectively as "Yuanxing Packaging").

Under the terms of the LOI with Yuanxing Packaging (available on SEDAR), the Company will issue such number of shares of the Company to the shareholders of Yuanxing Packaging, which will represent a valuation of approximately $80 million based on a deemed price of $0.40 per share.

Given the size of Yuanxing Packaging relative to the Company, this transaction will represent a Reverse Takeover transaction as defined under Policy 5.2 of the TSX Venture Exchange (the "Exchange"). As such, the Company is required to halt trading in its stock pursuant to Policy 5.2 and the Company's stock will resume trading when the Company meets the requirements for reinstatement of trading under Policy 5.2.

Completion of the Acquisition contemplated under the LOI is subject to, among other conditions, the following conditions:

1. the receipt of all necessary regulatory, corporate and third party approvals, including the approval of the Exchange, and compliance with all applicable regulatory requirements and conditions in connection with the Acquisition;
   
2. the execution of a definitive agreement (the "Definitive Agreement") including the terms of the LOI and other generally accepted terms and conditions materially similar to the Acquisition on or before July 31, 2012, or such later date as mutually agreed upon by the Purchaser and Yuanxing Packaging;
   
3. completion of the due diligence by both the Purchaser and Yuanxing Packaging, acting reasonably, with respect to matters related to the Acquisition; and
   
4. if required by the Exchange, the receipt of the approval by the Company's shareholders.

The closing date of the Acquisition is scheduled to be 10 business days following the satisfaction or waiver of the condition precedents contained in the LOI and the Definitive Agreement, but in any event no later than October 31, 2012, or such later date as mutually agreed upon by the Company and Yuanxing Packaging.

As part of the proposed Acquisition, the Company is required to obtain a sponsor to submit a sponsorship report to the TSX Venture Exchange. Canaccord Genuity Corp., subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion. In addition, the Company has entered into an agreement with Canaccord Genuity to provide advisory services.

About Yuanxing Package

Yuanxing China, together with its associated company, Yuanxing Suzhou, manufactures and markets a variety of retail/shopping bags and packaging products to the Chinese market. Yuanxing Packaging produces a full line of disposable, recyclable and reusable retail/shopping bags produced from paper, polyethylene and from non-woven, recyclable fiber.

From its manufacturing facilities in Quanzhou, Fujian Province and Suzhou, Jiangsu Province, Yuanxing Packaging employs over 1,400 people in the design and manufacturing of approximately 600 million of retail/shopping bags per year. Yuanxing Packaging has over 200 customers across China who are primarily Chinese clothing retailers and manufacturers with retail outlets. The retail/shopping bags are use as point-of-sale packaging and advertising for the Yuanxing Packaging's customers.

Based on IFRS unaudited financial statements, Yuanxing Packaging had combined financial results as follows:

(Canadian $000)	12 months ended 31/12/2011	12 months ended 31/12/2010	12 months ended 31/12/2009
Revenues	78,342	46,303	28,049
Gross Margin	24,594	12,630	5,846
Net Income	16,858	8,043	3,493

A full set of audited financial statements for both operating companies will be available as part of the Filing Statement or Information Circular to be filed by the Company for the Acquisition. The Company will also be issuing follow-up news releases to provide update on the progress of the Acquisition and additional information relating to the Acquisition from time to time before resumption of trading of the Company's stock is effected.

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 and pharmaceutical industries in China. The Company operates a 38,000 square meter plant located in Yichun City, Jiangxi Province in PRC.

This news release contains certain statements that may be deemed "forward looking statements". Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward looking statements, except as required by law, in the event that management's beliefs, estimates or opinions, or other factors, should change.