PRO-PAC PACKAGING LIMITED — Capital/Financing Update 2017

Oct 9, 2017

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10 October 2017

Commencement of Pro-Pac's fully underwritten $54.8 million equity raising

Key Highlights

• Commencement of fully underwritten 2 for 3 non-renounceable entitlement offer at $0.34 per share to raise up to $54.8 million.

• Proceeds from the entitlement offer will be used to partially fund the cash component of the merger with Integrated Packaging Group Pty Ltd.

• Confirmation of support from Pro-Pac's major shareholder, Benammon Pty Ltd.

• Entitlement offer is fully underwritten by Bell Potter Securities Limited.

Entitlement Offer

On 11 September 2017, Pro-Pac announced that it had entered into a Share Sale Agreement to merge with Integrated Packaging Group Pty Ltd for $177.5 million (the “ Merger ”).

As foreshadowed in Pro-Pac's announcement of the Merger, it is a condition of the Merger that Pro-Pac undertakes a fully underwritten 2 for 3 non-renounceable entitlement offer at $0.34 per share to raise up to $54.8 million.

Accordingly, existing Pro-Pac shareholders are being offered the opportunity to acquire fully paid ordinary shares in the capital of Pro-Pac (" New Shares ") via a non-renounceable entitlement offer on the basis of 2 New Shares for every 3 existing shares held by eligible shareholders registered at 7:00pm (ADST) on Friday, 13 October 2017 (" Record Date "), at an issue price of $0.34 per New Share (" Offer Price ") to raise up to approximately $54.8 million before costs (“ Entitlement Offer ”).

The Offer Price represents a 10.2% discount to the 30-day VWAP of Pro-Pac shares prior to the announcement on 11 September 2017, or a 14.7% discount to the VWAP following the announcement.

Eligible shareholders will comprise those shareholders with a registered address in Australia and New Zealand at the Record Date.

Approximately 161.2 million New Shares are expected to be issued under the Entitlement Offer, depending on the rounding of fractional entitlements on the Record Date and the number of shares held on that date by ineligible shareholders. The New Shares will rank equally with existing ordinary shares but will not be eligible for the FY17 final dividend.

The Entitlement Offer is fully underwritten by Bell Potter Securities Limited ( Underwriter ).

Pro-Pac major shareholder Bennamon Pty Ltd has committed to taking up its pro-rata entitlement of $28.1 million.

The Entitlement Offer is not conditional on completion of the Merger. If the Merger does not complete for any reason, Pro-Pac will consider options in relation to the use of funds raised.

If the Merger does not complete for any reason, the Underwriter is entitled to terminate its obligation to underwrite 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

Further details about the Entitlement Offer, including the terms of the agreement with the Underwriter are contained in the Investor Presentation, announced to the market on 11 September 2017 and the Entitlement Offer booklet which will be made available to all eligible shareholders in accordance with the indicative timetable set out below.

Indicative Timetable for the Entitlement Offer

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	Before 10.00am, Tuesday, 10 October 2017
Notice sent to option holders
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
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 ofshortfall	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.

Enquiries

The Entitlement Offer booklet and associated ASX releases will be made available on the ASX Market Announcements Platform in due course.

Copies of the Entitlement Offer booklet and entitlement forms will be mailed to all eligible shareholders in accordance with the timetable set out above, including further instructions on how to take up entitlements.

For further information please contact:

Grant Harrod Mark Saus CEO - Pro-Pac Packaging Limited CFO - Pro-Pac Packaging Limited Tel (02) 8781 0500 Tel (02) 8781 0500

About Pro-Pac

Pro-Pac Packaging Limited is a diversified manufacturing and distribution company, providing industrial, flexible and rigid packaging solutions for a broad group of blue chip and SME clients. Pro-Pac is headquartered in Sydney with a national footprint including operations in all mainland states. Pro-Pac’s securities are listed and quoted on the ASX. For further information on Pro-Pac visit www.ppgaust.com.au.

About IPG

IPG is Australia’s largest specialist manufacturer and distributor of flexibles, film, wrap and associated products with #1 or #2 positions in key end markets. IPG operates five world class manufacturing facilities across Australia and New Zealand and has a strong and proven track record of manufacturing high quality products for its diversified blue-chip customer base. For further information on IPG visit www.integratedpackaging.com.au.