PRO-PAC PACKAGING LIMITED — Capital/Financing Update 2017

Oct 10, 2017

11 October 2017

The Manager Company Announcements ASX Limited Level 4, 20 Bridge Street Sydney NSW 2000

Dear Sir/Madam

Pro-Pac Packaging Limited (ASX:PPG) Despatch of Letter to Shareholders

Pro-Pac Packaging Limited confirms that the enclosed letter will be despatched today.

Yours faithfully

Mark Saus Company Secretary

11 October 2017

Dear Shareholder

Pro-Pac Packaging Limited (ASX Code: PPG) Non Renounceable Rights Offer Notification of information contained in Appendix 3B lodged on 10 October 2017

This letter is to notify you that on 10 October 2017, Pro-Pac Packaging Limited (PPG) announced to the ASX a non-renounceable, pro-rata entitlement offer to eligible shareholders (Entitlement Offer). You will receive your copy of the entitlement offer booklet (Offer Booklet) and the Entitlement and Acceptance Form shortly. The Offer Booklet has been lodged with the ASX and is available on the ASX website (www.asx.com.au) and the PPG's website (http://www.pro-pac.com.au/).

The offer is for 2 new PPG shares (New Shares) for every 3 existing shares held as at 7.00pm (Sydney time) on 13 October 2017 (Record Date) at an issue price of \$0.34 per share. Approximately 161.2 million New Shares are expected to be issued under the Entitlement Offer (the number of shares will depend on the rounding of fractional entitlements on the Record Date and the number of shares held on that date by ineligible shareholders), to raise a maximum amount of \$54.8 million.

The Entitlement Offer is fully underwritten by Bell Potter Securities Limited (Bell Potter). Bell has received signed firm commitments from existing shareholders and/or institutional investors to either take up their rights or sub-underwrite the Entitlement Offer. PPG's major shareholder, Bennamon Pty Ltd, has committed to taking up its pro-rata entitlement of \$28.1 million.

On 11 September 2017, PPG announced it had entered into a binding agreement to acquire 100% of Integrated Packaging Group Pty Limited ACN 132 697 664 and its subsidiaries (IPG) in consideration for \$177.5 million (Acquisition). It is intended that the gross proceeds raised from the Entitlement Offer will be used to partly fund the cash consideration for the Acquisition.

This offer is open to PPG shareholders as at the Record Date with registered addresses in Australia and New Zealand. Please note that shareholders at the Record Date with a registered address outside Australia or New Zealand (Overseas Shareholders) will not be eligible to participate in the Entitlement Offer.

PPG will seek quotation on the ASX of the New Shares issued pursuant to the Entitlement Offer.

Building 1, 147-151 Newton Rd Wetherill Park NSW 2164 P.O Box 6484, Wetherill Park NSW 2164

Tel: (02) 8781 0500 Fax: (02) 8781 0599 Web: www.ppgaust.com.au

The key information and dates are set out below for your information.

Summary of key information

Type of offer	Non Renounceable, Pro-Rata Rights Offer of approximately 161.2 million New Shares to Australia and New Zealand resident shareholders on the Record Date (the number of shares will depend on the rounding of fractional entitlements on the Record Date and the number of shares held on that date by ineligible shareholders).
Issue price for each New Share	\$0.34 per New Share
Offer ratio (Entitlement)	2 New Shares for every 3 existing Sharesat the Record Date.
Underwriter and underwriting and management fee	Bell Potter Securities Limited has agreed to fully underwrite the Entitlement Offer for a total fee of up to 3.5% of the total proceeds of the Entitlement Offer (excluding GST) and will be reimbursed for certain expenses.

Proposed timetable

An indicative timetable of key dates in relation to the Entitlement Offer is set out below.

Event	Date/Time (AEST)
Announcement of Entitlement Offer Lodgment of Appendix 3B Notice sent to option holders	Before 10.00am, Tuesday, 10 October 2017
Notice sent to shareholders	Wednesday, 11 October 2017
Ex-entitlement date	Thursday, 12 October 2017
Record Date	Friday, 13 October 2017 (at 7:00pm ADST)
Entitlement Offer opens	Wednesday, 18 October 2017

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Last day to give notice to extend closing date	Wednesday, 25 October 2017
Entitlement Offer closes	Monday, 30 October 2017
Deferred settlement trading	Tuesday, 31 October 2017
Shortfall notice issued to underwriters and notify ASX of shortfall	Thursday, 2 November 2017
Issue of Entitlement Offer shares	Monday, 6 November 2017
Commencement of trading of Entitlement Offer shares	Tuesday, 7 November 2017

The timetable is indicative only and Pro-Pac reserves the right to amend the dates at its discretion and without notice, subject to the ASX Listing Rules and Corporations Act.

For further information regarding the offer please contact Boardroom Limited, on 02 9290 9600 (for callers within Australia) and +61 2 9290 9600 (for callers outside Australia).

Yours faithfully

Mark Saus Company Secretary

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