6 May 2010 07:32
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.
Update on 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") and the subsequent update announced on 27 April 2010, Cathay International Holdings Ltd. (LSE: CTI.L) ("Cathay" or the "Company"), the London listed company specialising in investment opportunities in the People's Republic of China ("PRC"), announces that the public offer of shares in its subsidiary Lansen Holdings, the specialist developer and marketer of drugs for rheumatic diseases in the PRC, has been significantly over subscribed.
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 Public Offer was approximately 852 times oversubscribed. As a result of the over-subscription of the Public Offer, the clawback mechanism described in the Circular has been applied. The number of Lansen Holdings Shares available under the Public Offer has been increased from the original 10% to 50% of the total number of Lansen Holdings Shares initially available for subscription under both the Placing and the Public Offer. There has been an over-allocation of 15,000,000 additional Lansen Holdings Shares. It is expected that such Lansen Holdings Shares will be borrowed from the Company's subsidiary, CI Pharma China, under the terms of a stock borrowing agreement, and shall be returned to CI Pharma China by exercising the Over-allocation Option, or by making purchases in the secondary market at prices not exceeding the Flotation Offer Price, or by a combination of these means.
The Flotation Offer Price has been set at HK$3.91 per share. The net proceeds payable to Lansen Holdings under the Share Offer, after deducting underwriting commission and other expenses, are expected to be approximately HK$350.4 million (US$45.1 million). The net proceeds of the Partial Disposal to be received by the Company are expected to be approximately HK$114.9 million (US$14.8 million).
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 Cathay 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.
Lansen Holdings is a rapidly growing pharmaceutical company principally engaged in the development, production and sale of rheumatic specialty prescription western pharmaceuticals in the PRC. The Lansen Group focuses on the therapeutic treatment of rheumatic diseases involving joints, soft tissues and connective tissues, including rheumatic arthritis, osteoarthritis, back pain and soft tissue pain. Its product portfolio now consists of five rheumatic specialty prescription western pharmaceuticals and 13 other non-core pharmaceuticals. In 2008, the Lansen Group had a leading market share with approximately 22.8% of sales of disease modifying anti-rheumatic drugs (DMARDs, a category of drugs focussed on slowing the progression of rheumatic diseases as opposed to simply treating inflammation) in the PRC.
The Lansen Group has established an extensive sales and distribution network, with more than 260 sales representatives and over 500 direct customers who comprise distributors and other customers, covering over 1,000 hospitals in 25 provinces and four municipalities in the PRC.
Lansen is focused on identifying, developing and commercialising products principally in the rheumatic therapeutic areas. It is expected that a pipeline of new rheumatic products will be launched in the next few years, and the Lansen Group plans to launch three new products in 2010.
Mr Lee Jin Yi, Chief Executive Officer of Cathay said:
"We are delighted, both for Lansen, and the shareholders of CIH, by the interest and support by investors in Lansen. This is testimony both to the quality of the Lansen business and its prospects for growth within the PRC pharmaceutical market. It is also an endorsement of the investment strategy of the CIH managment team and its ability to identify opportunities in the PRC to build shareholder value."
Mr Stephen Hunt, Chairman and non-executive director of Lansen Holdings said:
"On behalf of the Board of Directors of Lansen I would like to thank investors for their significant interest in investing in Lansen. We are excited by Lansen's significant opportunities and look forward to growing the business for the benefit of our shareholders, customers and employees."
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:
| "CI Pharma China" | Cathay International Pharma Manufacture & Distribution (China) Limited, a company incorporated in the British Virgin Islands on 25 February 2005, an indirect wholly owned subsidiary of Cathay |
| "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 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 |
| "Over-allocation Option" | the option 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 |
| "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 |
| "Reorganisation" | the corporate reorganisation of the Lansen Group carried out in part in 2008 and 2009, and to be completed by the acquisition of Lansen by Lansen Holdings immediately prior to the Flotation |
| "Share Offer" | the Public Offer and the Placing |
| "Sole Bookrunner" | Piper Jaffray Asia Securities Limited, appointed as sole bookrunner in connection with the Flotation |