Jun 07, 2012. /Lesprom Network/. Asia Packaging Group Inc. has entered into a letter of intent (the "LOI") relating to the potential acquisition of Yuanxing Holdings (Hong Kong) Ltd., which is a holding company that holds all of the issued and outstanding share capital of Yuanxing Package (China) Co. Ltd., as well as its related company, Yuanxing Package (Suzhou) Co., Ltd. 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. 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. 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. 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. Asia Packaging Group, through its wholly-owned subsidiaries in the People's Republic of China, is in the business of manufacturing packaging products and services to the food and pharmaceutical industries in China.