TIDMCTI
RNS Number : 0491J
Cathay International Holdings Ld
30 November 2018
Cathay International Holdings Limited
("Cathay" or the "Company")
Proposed Further Disposal of Starry Shares by Lansen
Hong Kong, 30 November 2018 - Cathay International Holdings
Limited (LSE: CTI.L), an operator and investor in the growing
healthcare sector in the People's Republic of China, announces that
its subsidiary, Lansen Pharmaceutical Holdings Limited (Lansen)
(HKEX: 503), has announced today proposals to dispose of its
remaining shares in Zheijang Starry Pharmaceutical Co., Ltd
(Starry) (Further Disposal).
The Company owns 50.56 per cent of the issued share capital in
Lansen and Lansen owns 12,775,000 shares in Starry, representing
10.65 per cent of Starry's issued share capital. Starry is listed
on the Shanghai Stock Exchange and at the market price on 29
November 2018 of RMB 23.83 (USD 3.44), Lansen's shareholding in
Starry had a value of RMB 300.0 million (USD 43.3 million). The
Further Disposal will be completed through on-market transactions
over a period of up to 12 months.
The Further Disposal constitutes a Class 1 transaction under the
Listing Rules and is therefore conditional upon, inter alia, the
issue of a circular by the Company and on shareholder approval. An
explanatory circular will be sent to Cathay shareholders as soon as
practicable, containing, inter alia, notice of a general
meeting.
As the Starry shares are held by Lansen and Lansen is listed on
the Hong Kong Stock Exchange, the Further Disposal also constitutes
a very substantial disposal under the rules of the Hong Kong Stock
Exchange and is also conditional on approval by Lansen's
shareholders. Lansen will send an explanatory circular to its
shareholders as soon as practicable, containing, inter alia, notice
of a general meeting of Lansen.
The full text of the announcement by Lansen can be found at
http://www3.hkexnews.hk/listedco/listconews/SEHK/2018/1130/LTN20181130494.pdf
and will also be made available at Announcements & Notices
section of Lansen's homepage at
http://holding.lansen.com.cn//en/newslist.aspx?NodeCode=10002000700050005.
Starry was established in 1997 and listed on the Shanghai Stock
Exchange on 9 March 2016 (with stock code 603520). Starry is a
Chinese pharmaceutical company specialising in the research and
development, manufacture and marketing of raw materials and
intermediate ingredients for non-ionic contrast agents, including
Iohexol and Iopamidol (used in interventional radiology to enhance
the contrast of structures or fluids within the body in medical
imaging), and of Fluoroquinolones including levofloxacin
hemihydrate and levofloxacin HCL (antibacterial compounds used in
the treatment and prevention of bacterial infections).
For the financial year ended 31 December 2017, Starry reported
profits before taxation of RMB 103.5 million (2016 RMB 97.4
million) and gross assets of RMB 2.01 billion (2016: RMB 1.89
billion).
The management team of Starry is as follows:
Mr. Hu Jinsheng is the Chairman of Starry.
Mr. Hu Jian is the Deputy Chairman and General Manager of
Starry.
At the time of Starry's listing on the Shanghai Stock Exchange
it had a valuation of RMB 1.46 billion (approximately USD 224.2
million), valuing the CIH Group's then 16.125 per cent.
shareholding at approximately RMB 235 million (approximately USD
36.1 million). Starry's share price rose significantly from the IPO
price of RMB 12.15 (USD 1.87) per share and Lansen subsequently
sold 4,175,000 shares at RMB 43.11 (USD 6.25) each on 15 March 2017
(First Disposal) and a further 2,400,000 shares at RMB 27.22 (USD
4.24) each on 6 June 2018 (Second Disposal), representing, in
aggregate, gross sale proceeds of RMB 245.3 million (approximately
USD 36.3 million) and a gain on disposal of RMB 140.0 million
(approximately USD 20.7 million). As a result, as at the date of
this announcement, the CIH Group holds 12,775,000 Starry Shares
representing 10.65 per cent. of the issued share capital in
Starry.
The CIH Group has already made a significant return on the
Starry Shares: the First and Second Disposals realised an aggregate
cash sum (USD 36.3 million) in excess of the total cost of the
original investment (USD 25.8 million), representing a return of
320 per cent. The current market price of a Starry Share is RMB
23.83 (USD 3.44), valuing the CIH Group's remaining shareholding at
RMB 300.0 million (approximately USD 43.3 million).
For the purposes of seeking Shareholder approval for the Further
Disposal, the Company informs that Lansen has set a minimum price
of RMB 12.61 (USD 1.82) per share, being the current book cost of
the Starry Shares (Minimum Selling Price) at Lansen. A sale at this
price would generate gross proceeds of RMB 161.1 million
(approximately USD 23.2 million), representing a return of 42 per
cent on the original cost of the Starry Shares (before expenses and
taxes, estimated at USD 692,000).
At the Minimum Selling Price a nil gain/loss would be recorded
in the CIH Group's profit and loss account and there would be no
impact to the net asset value of the Company (before expenses and
taxes, estimated at USD 692,000).
If the actual selling price is higher than the Minimum Selling
Price, the cash proceeds would be higher, a gain would be recorded
and net assets would increase by an amount equal to the excess over
the Minimum Selling Price (before expenses and taxes, estimated at
USD 692,000).
Furthermore, the CIH Group currently recognises its share of
Starry's post-tax profits and dividends paid by Starry. Following
the Further Disposal of all Starry Shares in full, the CIH Group
will cease to recognise its share of Starry's post-tax profits and
dividends paid by Starry.
The proceeds of the Further Disposal will be used by Lansen for
general working capital.
-Ends-
For further enquiries, please contact:
Cathay International Holdings Limited
Eric Siu (Finance Director) Tel: +852 2828 9289
Patrick Sung (Director and Controller)
Consilium Strategic Communications
Mary-Jane Elliott / Matthew Neal / Lindsey Neville Tel: +44 (0) 203 709 5702
About Cathay
Cathay International Holdings Limited (LSE: CTI.L) is a main
market listed investment holding company and an operator and
investor in the growing healthcare sector in the People's Republic
of China (the "PRC"). The Company and its subsidiaries
(collectively the "Group") aim to leverage growth opportunities in
the strong and growing domestic demand for high quality healthcare
products in the PRC and build portfolio companies into market
sector leaders with a competitive edge. Cathay has already
demonstrated a strong track record of identifying high growth
potential investment opportunities in this area including: Lansen,
a leading specialty pharmaceutical company focused on rheumatology
and dermatology in the PRC; Haizi, a company engaged in the
manufacture, marketing and sale of inositol and its by-product,
di-calcium phosphate; Natural Dailyhealth, a company engaged in
production and sales of plant extracts for use as key active
ingredients in healthcare products; and Botai, a company engaged in
collagen products.
The Group employs approximately 1,800 people across the PRC,
including over 20 specialist corporate and business development
staff based at the holding company's offices in Hong Kong and
Shenzhen. Cathay also owns a hotel in Shenzen. For more information
please visit the Company's website: www.cathay-intl.com.hk.
About Lansen
Lansen, whose shares are listed on the main board of the Hong
Kong Stock Exchange, is a 50.56% owned subsidiary of Cathay. Lansen
is engaged in the manufacture, distribution and development of
specialty prescription drugs for treatment of autoimmune disorder
in rheumatology and dermatology. Lansen is in a leading market
position in disease modifying anti-rheumatic drugs ("DMARDs") for
treatment of rheumatoid arthritis ("RA") in the PRC. Lansen has
established an extensive distribution network, covering more than
1,000 hospitals in four municipalities, 25 provinces and cities in
the PRC. For more information please visit the Lansen's website:
www.lansen.com.cn/en/index.aspx.
About Starry
Starry, whose shares are listed on the Shanghai Stock Exchange
(stock code: 603520), is 10.65% owned by Lansen. Starry is
specialised in the research and development, manufacture, marketing
and sales of bulk pharmaceuticals and intermediates. One of the
core products of Starry is iohexol for X-CT non-ionic contrast
agents. Starry is the largest generic drug manufacturer of
iohexol's active pharmaceutical ingredients in the PRC and is
experienced in the production management and quality control of
bulk pharmaceuticals. For more information please visit Starry's
website: http://www.starrypharm.com/en/index.aspx.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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