On February 17, 2017, China XD Plastics Company Limited (the
“Company”) issued a press release announcing that its board of
directors (the “Board”) has received a preliminary non-binding
proposal letter, dated February 16, 2017, from its Chairman and
Chief Executive Officer, Mr. Jie Han (“Mr. Han”), XD.
Engineering Plastics Company Limited (“XD Engineering”), a
company incorporated in the British Virgin Islands and wholly
owned by Mr. Han, and MSPEA Modified Plastics Holding Limited, an
affiliate of Morgan Stanley Private Equity Asia III, Inc.
(collectively, the “Buyer Consortium”), to acquire all of the
outstanding shares of common stock of the Company not already
beneficially owned by the Buyer Consortium in a “going-private”
transaction (the “Transaction”) for US$5.21 per share of common
stock in cash. This price represents a premium of approximately
28.6% to the Company’s closing price on February 15, 2017, and a
premium of approximately 29.3% to the average closing price
during the last 30 trading days. The proposal letter states that
the Buyer Consortium expects that the Board will appoint a
special committee of independent directors to consider the
proposal and make a recommendation to the Board. The proposal
letter also states that the Buyer Consortium will not move
forward with the proposed Transaction unless it is approved by
such a special committee, and the proposed Transaction will be
subject to a non-waivable condition requiring approval by
majority shareholder vote of shareholders other than the Buyer
Consortium members. The Buyer Consortium currently beneficially
owns approximately 74% of the issued and outstanding shares of
common stock of the Company on a fully diluted and as-converted
basis.

The Board has established a special committee (the “Special
Committee”) of disinterested directors to consider the proposal
The Special Committee is composed of the following independent
directors of the Company: Mr. Lawrence W. Leighton, Mr. Feng Li,
and Mr. Linyuan Zha, with Mr. Leighton serving as chairperson of
the Special Committee. The Special Committee will be responsible
for evaluating, negotiating and recommending to the Board any
proposals involving a strategic transaction by the Company with
one or more third parties. The Special Committee intends to
retain advisors, including an independent financial advisor, to
assist in the evaluation of the proposal and any additional
proposals that may be made by the Buyer Consortium.

The Special Committee cautions the Company’s shareholders and
others considering trading in its securities that the Special
Committee has not made any decisions with respect to the
Company’s response to the proposal. There can be no assurance
that any definitive offer will be made by the Buyer Consortium or
any other person, that any definitive agreement will be executed
relating to the proposed Transaction, or that this or any other
transaction will be approved or consummated.

A copy of the press release is filed herewith as Exhibit 99.1 to
this current report on Form 8-K and is incorporated herein by
reference.

Item 9.01 Financial Statements and Exhibits.