27 Apr 2010 16:25
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA.
THE CONTENTS OF THIS ANNOUNCEMENT DO NOT CONSTITUTE OR FORM PART OF AN OFFER OF OR INVITATION TO SELL OR ISSUE OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR ANY SECURITIES FOR SALE IN ANY JURISDICTION NOR SHALL THEY (OR ANY PART OF THEM) OR THE FACT OF THEIR DISTRIBUTION FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, OR ACT AS AN INDUCEMENT TO ENTER INTO, AND CONTRACT OR COMMITMENT TO DO SO.
CATHAY INTERNATIONAL HOLDINGS LTD.
Proposed Flotation and Partial Disposal of
Lansen Pharmaceutical Holdings Company Limited ("Lansen Holdings")
Further to the circular to Shareholders posted on 1 April 2010 (the "Circular") Cathay International Holdings Ltd. (LSE: CTI.L) ("Cathay" or the "Company") announces today that, in preparation for the flotation its subsidiary, Lansen Holdings, on the Hong Kong Stock Exchange, a prospectus (the "Prospectus") has been filed today with the HKSE and application has been made to the Listing Committee of the HKSE for the listing of, and permission to deal in, the Lansen Holdings Shares in issue and to be issued pursuant to the Public Offer and Placing.
Definitions used in this announcement will have the same meaning as those used in the Circular, unless the context requires otherwise. Such definitions are set out at the end of this announcement for reference.
The Share Offer will comprise a Public Offer of initially 14,135,000 Lansen Holdings Shares, representing 10% of the total number of Lansen Holdings Shares being offered in the Share Offer (subject to reallocation), and a Placing of initially 127,215,000 Offer Shares (subject to reallocation and the Over-allocation Option).
Depending on the number of valid applications received under the Public Offer, the allocation of the Lansen Holdings Shares between the Public Offer and the Placing will be subject to reallocation. If either the Public Offer or the Placing is not fully subscribed, Piper Jaffray Asia Securities Limited, as sole lead manager, has the authority to re-allocate all or any of the Lansen Holdings Shares unsubscribed for under the Public Offer to the Placing (or vice versa, as appropriate) in such proportion and manner as it considers appropriate, provided that there is sufficient demand under the Placing to take up such re-allocated Public Offer Shares.
Lansen Holdings has granted the sole lead manager, the right, exercisable at any time from the date of the Public Offer Underwriting Agreement until 30 days from the last day for lodging applications under the Public Offer, to require Lansen Holdings to allot and issue up to an aggregate of 15,000,000 additional Lansen Holdings Shares, representing 15% of the total number of new Lansen Holdings Shares initially available under the Share Offer at the Flotation Offer Price, to cover over-allocations, if any, in the Placing. In the event that the Over-allocation Option is exercised, an announcement will be made.
The Flotation Offer Price is expected to be determined by agreement between the Sole Bookrunner, on behalf of the Underwriters and Lansen Holdings (for itself and on behalf of Cathay International Pharma Manufacture and Distribution (China) Limited and Loyal Peace Enterprises Limited as selling shareholders), after consultation with the Company, on or around Friday, 30 April 2010 and in any event, no later than Monday, 3 May 2010, when market demand for the Lansen Holdings Shares will be determined.
Completion of the Flotation is conditional upon, amongst other things, the listing committee of the HKSE granting the listing of the Lansen Shares and the obligations of the Underwriters under the Public Offer Underwriting Agreement and the Placing Underwriting Agreement becoming unconditional.
It is expected that dealings in the Lansen Holdings Shares on the HKSE will commence at 9.30 a.m. on 7 May 2010. Following completion of the Reorganisation, the Flotation and the Partial Disposal, it is expected that CIH will indirectly hold approximately 52.46% of Lansen Holdings, assuming that the Over-allocation Option is not exercised, or approximately 50.56% in the event that the Over-allocation Option is exercised in full.
The Prospectus contains the following audited financial information for the year ended 31 December 2009 for the Lansen Group:
|
| For the year ended 31 December |
|
| 2009 |
|
| US$'000 |
|
|
|
| Revenue
| 47,932 |
| Cost of sales
| (15,493) |
| Gross profit
| 32,439 |
| Other income
| 820 |
| Selling and distribution expenses
| (18,143) |
| Administrative expenses
| (5,546) |
| Profit from operations
| 9,570 |
| Finance costs
| (667) |
| Profit before income tax
| 8,903 |
| Income tax expense
| (1,523) |
| Profit for the year/period
| 7,380 |
| Other comprehensive income
|
|
| Exchange differences arising on translation of foreign operations | (36) |
| Other comprehensive income for the year/period, net of tax |
(36) |
| Total comprehensive income for the year/period |
7,344 |
| Profit attributable to equity holders of Lansen |
7,380 |
| Total comprehensive income attributable to equity holders of Lansen |
7,344 |
|
| As at 31 December |
|
| 2009 |
|
| US$'000 |
| ASSETS AND LIABILITIES |
|
| NON-CURRENT ASSETS |
|
| Property, plant and equipment | 16,951 |
| Land use rights | 2,398 |
| Intangible assets | 7,663 |
| Goodwill | 6,824 |
| Loans to management | - |
|
| 33,836 |
| CURRENT ASSETS |
|
| Inventories | 3,852 |
| Amounts due from fellow subsidiaries | - |
| Trade and other receivables | 20,592 |
| Land use rights | 53 |
| Pledged bank deposits | 800 |
| Cash and cash equivalents | 4,055 |
|
| 29,352 |
| TOTAL ASSETS | 63,188 |
| EQUITY AND LIABILITIES |
|
| CAPTIAL AND RESERVES |
|
| Equity attributable to equity holders of Lansen |
|
| Share capital | 29,491 |
| Share premium | 14 |
| Treasury shares | (6,605) |
| Exchange equalisation reserve | 2,787 |
| Statutory reserve | 704 |
| Retained profits | 3,565 |
| TOTAL EQUITY | 29,956 |
| NON-CURRENT LIABILITIES |
|
| Borrowings | 10,407 |
| Deferred tax liabilities | 394 |
|
| 10,801 |
| CURRENT LIABILITIES |
|
| Borrowings | 8,881 |
| Current tax liabilities | 258 |
| Dividend payables | - |
| Amount due to immediate holding company | - |
| Amount due to an intermediate holding company | - |
| Amount due to fellow subsidiaries | 311 |
| Trade and other payables | 12,981 |
|
| 22,431 |
| TOTAL LIABILITIES | 33,232 |
| TOTAL EQUITY AND LIABILITIES | 63,188 |
| NET CURRENT ASSETS/(LIABILITIES) | 6,921 |
| TOTAL ASSETS LESS CURRENT LIABILITIES | 40,757 |
| NET ASSETS
| 29,956 |
Enquiries
| Cathay International Holdings Ltd. | + 852 2828 9289 |
| Stephen Hunt / Patrick Sung / Eric Siu | |
| Piper Jaffray Ltd. | +44 (0)20 3142 8700 |
| Jamie Adams / Tom Rider | |
| Brunswick | +44 (0)20 7404 5959 |
| Jon Coles |
Piper Jaffray Ltd., which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for the Company as financial adviser in connection with the Flotation and Partial Disposal and not for any other person and will not be responsible to any other person for providing the protections afforded to its customers or for providing advice in relation to the Flotation and Partial Disposal or any other transaction or arrangement referred to in the Circular, the contents of the Circular and, if relevant, the accompanying documents or any arrangements referred to therein.
This news release has been issued by Cathay and is the sole responsibility of Cathay.
The distribution of this announcement in certain jurisdictions may be restricted by law and such distribution could result in violation of the laws of such jurisdictions. In particular, this announcement is not for distribution in the United States, Australia, Canada, Japan or South Africa.
The delivery of this announcement shall not, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this announcement nor that the information in it is correct as of any subsequent time.
This announcement may contain forward-looking statements that reflect the Company's current expectations regarding future events, including the clinical development and regulatory clearance of the Company's products, the Company's ability to find partners for the development and commercialisation of its products, the Company's liquidity and results of operations, as well as the Company's future capital raising activities. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors, including the success of the Company's research strategies, the applicability of the discoveries made therein, the successful and timely completion of clinical studies, the uncertainties related to the regulatory process, the ability of the Company to identify and agree beneficial terms with suitable partners for the commercialisation and/or development of its products, the acceptance of the Company's products by consumers and medical professionals, and the ability of the Company to identify and consummate suitable strategic and business combination transactions.
Definitions
The following definitions apply throughout this announcement unless the context requires otherwise:
| "A Shares" | the A shares of US$0.05 each in the capital of the Company |
| "CIH Shares" | the Common Shares and A Shares in issue at the date of the Circular |
| "Common Shares" | the common shares of US$0.05 each in the capital of the Company |
| "DIs" | the dematerialised depository interests in respect of Common Shares |
| "Flotation" | the proposed flotation of Lansen Holdings on the Hong Kong Stock Exchange and the associated offering of Lansen Holdings Shares and other connected arrangements, as more fully described in the Circular |
| "Flotation Offer Price" | the price at which Lansen Holdings Shares are allotted and issued in the Flotation |
| "Hong Kong Stock Exchange" or "HKSE" | The Stock Exchange of Hong Kong Limited |
| "Lansen" | Lansen Pharmaceutical Holdings Limited, a limited liability company established in the British Virgin Islands |
| "Lansen Group" | Lansen or, following the Reorganisation, Lansen Holdings, and their subsidiaries and associated companies, including Ningbo Liwah |
| "Lansen Holdings" | Lansen Pharmaceutical Holdings Company Limited, an exempted company incorporated in the Cayman Islands with limited liability on 10 September 2009 |
| "Lansen Holdings Shares" | shares of US$0.01 each in the capital of Lansen Holdings |
| "Ningbo Liwah" | Ningbo Liwah Pharmaceutical Company Limited, a company established under the laws of the PRC on 6 January 1993, an indirectly wholly-owned subsidiary of Lansen |
| "Over-allocation Option" | the option to be granted by Lansen Holdings to the Placing Underwriters exerciseable by the Sole Bookrunner pursuant to which Lansen Holdings may be required to issue additional Lansen Holdings Shares to cover over-allocations in the Placing |
| "Partial Disposal" | the proposed sale of approximately 13% of CIH's interest in Lansen Holdings in connection with the Flotation |
| "Placing" | the placing of Lansen Holdings Shares to professional and institutional investors and other private investors including brokers, dealers, companies (including fund managers) whose ordinary business involves dealing in shares and other securities and corporate entities which regularly invest in shares and other securities |
| "Placing Underwriters" | the underwriters of the Placing |
| "Placing Underwriting Agreement" | the underwriting agreement in respect of the Placing to be entered into between Lansen Holdings, the Selling Shareholders, the executive directors of Lansen Holding and the Placing Underwriters |
| "Public Offer" | the public offer of Lansen Holdings Shares open to members of the public in Hong Kong and to institutional and professional investors for cash at the Flotation Offer Price |
| "Public Offer Underwriters" | the underwriters of the Public Offer |
| "Public Offer Underwriting Agreement" | the underwriting agreement in respect of the Public Offer to be entered into between Lansen Holdings, the Company, the Selling Shareholders, the executive directors of Lansen Holding and the Placing Underwriters |
| "Reorganisation" | the corporate reorganisation of the Lansen Group carried our in part in 2008 and 2009, and to be completed by the acquisition of Lansen by Lansen Holdings immediately prior to the Flotation |
| "Shareholders" | holders of CIH Shares or, as the context may permit, holders of CIs representing CIH Shares |
| "Share Offer" | the Public Offer and the Placing |
| "Sole Bookrunner" | Piper Jaffray Asia Securities Limited, appointed as sole bookrunner in connection with the Flotation |
| "Underwriters" | the Public Offer Underwriters and the Placing Underwriters |