levofloxacinstarry

RegulatoryStoryGotomarketnewssectionCompanyCathayInternationalHoldingsLdTIDMCTIHeadlineZhejiangStarryPharmaceuticalCo.
,Ltd.
Released07:0016-Nov-2010Number2440W07RNSNumber:2440WCathayInternationalHoldingsLd16November2010CATHAYINTERNATIONALHOLDINGSLIMITEDProposedminorityinvestmentinZhejiangStarryPharmaceuticalCo.
,Ltd.
('Starry')CathayInternationalHoldingsLtd.
(LSE:CTI.
L)('Cathay'orthe'Company'),acompanyinvestingprimarilyinthegrowingpharmaceuticalandhealthcaresectorsinthePeople'sRepublicofChina('PRC'),announcestodaythat:·LansenPharmaceuticalHoldingsLimited(HKE:503.
HK)('Lansen'),theCompany'ssubsidiarylistedonthemainboardoftheHongKongExchange,hasannouncedtodaythatithasagreedthetermsforthepurchaseofa20%equityinterestinStarry('Lansen'sInvestment')fromanindependentthirdpartyforacashconsiderationofapproximatelyUS$24million;and·theCompanyhasagreedthetermsforthepurchaseofa1.
5%equityinterestinStarry(the'Company'sInvestment')fromthesameindependentthirdpartyforacashconsiderationofapproximatelyUS$1.
8million.
DetailsofthetransactionLansen'sInvestmentistobeeffectedpursuanttoanequitytransferagreement(the'LansenAgreement')underwhichLansenInvestments(HongKong)Limited('LSI'),anindirectwhollyownedsubsidiaryofLansen,hasagreedtopurchaseandMr.
LiewYewThoong(the'Vendor'),oneoftheexistingminorityshareholdersofStarry,hasagreedtosell,20%oftheregisteredcapitalofStarryforacashconsiderationofapproximatelyUS$24million(RMB160million).
TheCompany'sInvestmentistobeeffectedpursuanttoaseparateequitytransferagreement(the'CathayAgreement')underwhichFullKeenLimited('FKL')anindirectwholly-ownedsubsidiaryoftheCompany,hasagreedtopurchaseandtheVendorhasagreedtosell,1.
5%oftheregisteredcapitalofStarryforacashconsiderationofapproximatelyUS$1.
8million(RMB12million).
ZhejiangStarryPharmaceuticalCo.
,Ltd.
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1of411/16/20103:03PMInformationonStarryStarryisasino-foreignequityjointventureincorporatedunderthelawsofthePRC.
Itisacompanyspecializingintheproductionofbulkpharmaceuticalsandintermediates.
ThetwocorebulkpharmaceuticalproductsofStarryareiohexolforX-CTnon-ioniccontrastagentsandlevofloxacinforantibiotics.
StarryisthelargestiohexolmanufacturerinthePRCandisexperiencedintheproductionmanagementandqualitycontrolofbulkpharmaceuticals.
SetoutbelowisasummaryoftheauditedfinancialresultsofStarryforthetwoyearsended31December2008and31December2009,whichwerepreparedinaccordancewiththePRCgenerallyacceptedaccountingprinciples:Yearended31December20092008EquivalentEquivalentRMB'000US$'000RMB'000US$'000Profitbeforetaxation57,9748,72532,8604,945Profitaftertaxation57,9748,72532,8604,945Grossassets549,49182,698467,79470,403Netassets199,70730,056139,05320,927ConsiderationTheconsiderationforLansen'sInvestmentisRMB160million(approximatelyUS$24million),whichshallbefundedthroughtheexistinginternalresourcesoftheLansengroup.
TheconsiderationfortheCompany'sInvestmentisRMB12million(approximatelyUS$1.
8million).
TheconsiderationwillbesatisfiedoutoftheCompany'sinternalresources.
Theconsiderationwasagreedafterarm'slengthnegotiationsbetweenLansen,theCompanyandtheVendor,takingintoconsideration,amongstotherthings,(i)thenetassetvalueofStarryasat31December2009;(ii)futureprospectsofthebusinessofStarry;(iii)theprospectsofthepharmaceuticalindustryinthePRCasawhole;and(iv)tradingpriceearningsmultiplesofStarry'smarketcomparablesinthePRC.
TheconsiderationpayablefortheCompany'sInvestmentandLansen'sInvestmentshallbesettledwithin10businessdaysofreceiptoftherelevantgovernmentapprovalinthePRCforthetransferoftheequityinterestsundertherespectiveagreement.
Iftherelevantgovernmentapprovalforthetransferoftheequityinterestsisnotreceivedwithin60daysfromthedateoftheapplicationforapproval(orsuchotherdateastheVendorandLSIorFKL,asthecasemaybe,mayagree)theLansenAgreementandtheCathayAgreementshalllapseandbeofnofurtherforceandeffect.
EffectofthetransactionontheCathaygroupandbenefitsofthetransactionThereasonsforandexpectedbenefitsofLansen'sInvestmentincludethefollowingmatters:·OneofLansen'sstrategiesistoexploreopportunities,throughbusinessalliancesoracquisitions,whichwouldexpanditsproductrangeofrheumaticspecialtydrugs,includingtheupstreambulkpharmaceuticalproductionforrheumaticspecialtydrugs.
TheboardofLansenbelievesthatLansen'sInvestmentprovidesLansenwithopportunitiestoparticipateintheupstreamZhejiangStarryPharmaceuticalCo.
,Ltd.
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2of411/16/20103:03PMsupplybusinessinthepharmaceuticalindustryvaluechain.
Lansen'sInvestmentisofstrategicsignificancesinceLansen'sInvestmentwillallowittodevelopexperienceintheproductionmanagementandcontrolofbulkpharmaceuticalsforitsdrugsinthefuture.
·Theimpactonbulkpharmaceuticalsappeartobelesssubstantialthantheimpactondownstreampharmaceuticalproductsundertherecent"DrugPriceControlMeasures"discussionpaperpublishedbythePRCgovernment.
Lansen'sInvestmentwillachieveacertaindegreeofdiversificationofproductconcentrationrisk.
·Lansen'sboardbelievesthatLansen'sInvestmentisconsistentwithLansen'sbusinessobjectiveofestablishingandstrengtheningbusinessallianceswithpharmaceuticalcompanies.
LansenwillbenefitfromStarry'sexperienceinareasincludingrawmaterialsproductiontechnology,GMPcertification,costandqualitycontrol,andenvironmentalprotection.
LansenisnotexpectedtodevotesignificanthumanandmanagementresourcestoStarry'soperations.
·Lansen'sboardconsidersthatthetermsandconditionsoftheLansenAgreement,includingtheconsiderationthereof,arefairandreasonableandthattheenteringintooftheLansenAgreementisintheinterestsofLansenanditsshareholdersasawhole.
ForCathay,theCompany'sInvestmentisinlinewiththeintentionstatedintheCompany's2010interimreporttospecializeinthefastgrowingpharmaceutical,healthcareandenvironmentprotectionmarketsandtowidentheinvestmentscopeoftheCathayGrouptoincludepotentialminorityinvestmentpositions.
TheBoardofCathayconsidersthatthetermsandconditionsoftheCathayAgreement,includingtheconsiderationthereof,arefairandreasonableandthattheenteringintooftheCathayAgreementisintheinterestsoftheCompanyanditsshareholdersasawhole.
DetailsofkeyindividualsimportanttothebusinessofStarryMr.
HuJinsheng,56,founderandoneofthemajorshareholdersofStarry,hasbeeninthebusinessforthirtyyearsandpossessesextensiveexperienceinoperationalandfinancialmanagementissues.
Mr.
HuJinshengistheGeneralManagerofStarry.
Mr.
HuJian,thesonofMr.
HuJinsheng,isanothermajorshareholderofStarry.
Mr.
HuJianistheDeputyGeneralManagerofStarry.
EnquiriesCathayInternationalHoldingsLimited+85228289289JinyiLee/EricSiuBrunswick+44(0)2074045959JonColesCertainstatementsinthisannouncementareforward-lookingstatements.
ThesestatementsrelatetotheCathayGroup'sfutureprospects,developmentsandbusinessstrategies.
Forward-lookingstatementsareidentifiedbytheiruseoftermsandphrasessuchas"believe","could","envisage","estimate","intend","may","plan","will"orthenegativeofthose,variationsorcomparableexpressions,includingreferencestoassumptions.
Theforward-lookingstatementsinthisannouncementarebasedoncurrentexpectationsandaresubjecttorisksanduncertaintiesthatcouldcauseactualresultstodiffermateriallyfromthoseexpressedorimpliedbythosestatements.
Giventheserisksanduncertainties,potentialinvestorsshouldnotplaceanyrelianceonforward-lookingZhejiangStarryPharmaceuticalCo.
,Ltd.
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3of411/16/20103:03PMstatements.
Theseforward-lookingstatementsspeakonlyasatthedateofthisannouncement.
NeithertheDirectorsnortheCompanyundertakeanyobligationtoupdateforward-lookingstatementsotherthanasrequiredbytheListingRules,DisclosureandTransparencyRules,applicablelegislationorbytherulesofanyothersecuritiesregulatoryauthority,whetherasaresultofnewinformation,futureeventsorotherwise.
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2009LondonStockExchangeplc.
AllrightsreservedRegulatoryZhejiangStarryPharmaceuticalCo.
,Ltd.
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