9 Apr 2020 10:51
Cathay International Holdings Limited
("Cathay" or the "Company")
Lansen's sixth share reduction plan of Starry
Hong Kong, 9 April 2020 - Cathay International Holdings Ltd. (LSE: CTI.L), an operator and investor in the growing healthcare sector in the People's Republic of China (the "PRC"), announces that, Lansen Pharmaceutical Holdings Limited ("Lansen", incorporated in the Cayman Islands) (HKEX: 503), the Company's 52.83% owned subsidiary, has made a regulatory announcement in accordance with the requirements of its Hong Kong listing.
Lansen has today announced its sixth share reduction plan (the "Sixth Share Reduction Plan") in relation to its holding in the shares of Zhejiang Starry Pharmaceutical Co., Ltd. ("Starry") ("Lansen Announcement"). The full text of the Lansen Announcement can be found at https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0409/2020040900729.pdf and will also be made available at the Announcements & Notices section of Lansen's homepage at http://holding.lansen.com.cn//en/newslist.aspx?NodeCode=10002000700050005
Before proceeding with a disposal, Lansen is required by the rules of the China Securities Regulatory Commission to announce a share reduction plan. Lansen has made such announcements previously on 9 March 2017, 19 September 2017, 3 April 2018, 20 February 2019 and 11 September 2019 in relation to the First Share Reduction Plan, Second Share Reduction Plan, Third Share Reduction Plan, Fourth Share Reduction Plan and Fifth Share Reduction Plan respectively.
(1) Lansen Investments (Hong Kong) Limited ("Lansen HK") and Full Keen Limited ("Full Keen") disposed an aggregate of 4,175,000 Starry Shares under the First Share Reduction Plan and the details of such disposal are set out in the announcement and circular dated 15 March 2017 and 28 April 2017 respectively;
(2) Lansen HK did not dispose of any Starry Share under the Second Share Reduction Plan;
(3) Lansen HK disposed an aggregate of 2,400,000 Starry Shares under the Third Share Reduction Plan and the details of such disposal are set out in the announcement dated 6 June 2018; and
(4) Lansen HK and Full Keen disposed an aggregate of 5,278,000 Starry Shares under the Fourth Share Reduction Plan and the details of such disposal are set out in the announcements dated 14 May 2019, 11 June 2019 and 10 September 2019.
(5) Lansen HK disposed an aggregate of 4,451,028 Starry Shares under the Fifth Share Reduction Plan and the details of such disposal are set out in the announcements dated 18 September 2019, 25 September 2019 and 12 December 2019.
The Lansen Announcement reports that on 9 April 2020 Lansen HK notified Starry about the sixth share reduction plan (the "Sixth Share Reduction Plan") in relation to its holding in the Starry Shares and the key points are:
• Maximum number of Starry Shares that can be disposed: not more than 6,715,972 Starry Shares for Lansen HK, representing not more than 4% of the total number of issued shares in Starry;
• Share reduction period: a period of six month commencing on the third trading day of the Shanghai Stock Exchange immediately following 10 April 2020, the date of Starry's announcement of the Sixth Share Reduction Plan (or a period of six month commencing on the 15th trading day of the Shanghai Stock Exchange immediately following 10 April 2020 for reduction of Starry Shares through centralised competitive bidding on the Shanghai Stock Exchange);
• Methods of share reduction for Lansen HK: through (a) block trade sales or (b) centralised competitive bidding system on the Shanghai Stock Exchange; provided that total amount of share reduction through block trade sales and the centralised competitive bidding system in any consecutive ninety days period shall not exceed 2% and 1% of the total number of issued shares in Starry respectively.
• Share reduction price: with reference to the prevailing trading price of Starry Shares on the Shanghai Stock Exchange.
The notification of the Sixth Share Reduction Plan was given by Lansen HK to Starry in accordance with the relevant rules and regulations of the China Securities Regulatory Commission, governing share reduction by shareholders.
As at the date of this announcement, no definitive or legally binding agreement relating to disposal of Starry Shares has been entered into by the Company or Lansen. Lansen will comply with the applicable requirements and relevant rules and regulations in relation to further disposal of Starry.
Lansen currently owns 6,715,972 Starry Shares which have a book value of USD9.2 million as at 31 December 2019 and a current market value of USD61.5 million as at 8 April 2020, of which USD4.9 million and USD32.5 million respectively is attributable to Cathay.
Starry listed on the Shanghai Stock Exchange on 9 March 2016 (with stock code 603520). Starry, established in 1997, 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).
Starry plans to further increase research and development in order to consolidate its technology advantage and develop new product lines. Starry's business plan includes product development and innovation, marketing and brand building, internal reform and human resource development. It will look for mergers and acquisition opportunities both domestically and internationally and will consider suitable financing options as required.
Starry published its audited results for the year ended 31 December 2019 on 31 March 2020, which showed gross assets of USD500 million and profits before taxation of USD31.8 million. The Group accounts for its interests in Starry using the equity method and in the audited group accounts for Cathay for the year ended 31 December 2019, Cathay showed the Carrying amount of its investment in Starry as USD9.2 million and Share of post-tax profit of associate as USD2.0 million.
The management team of Starry comprises Mr. Hu Jinsheng (Chairman) and Mr. Hu Jian (Deputy Chairman and General Manager).
The proceeds of the Further Starry Share Disposals will be received by Lansen and Lansen intends to use it for general working capital.
The proposed disposal would be a Class 1 transaction under the UK Listing Rules and subject to the publication of a circular and approval by Cathay's shareholders. Cathay published a circular on 27 March 2019 pursuant to which an SGM was held on 12 April 2019 at which Cathay's shareholders approved the disposal of Starry Shares on the terms set out in that circular for a period of 12 months which expires on 12 April 2020. Cathay intends to issue a circular seeking a further period of authority to dispose of the remaining Starry Shares as soon as possible.
In addition, the disposals are also conditional on the approval of Lansen's shareholders under the Hong Kong Listing Rules. Lansen held an EGM on 9 May 2019 at which Lansen's shareholders approved the disposal of Starry Shares for a period of 12 months which expires on 9 May 2020. Upon expiry of the authority, the proposed disposal is subject to the seeking of a further period of authority to dispose of the remaining Starry Shares under the relevant Hong Kong Listing Rules.
- 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 5700
About Cathay
Cathay International Holdings Limited (LSE: CTI.L) is a main market listed investment holding company and an operator and investor in the healthcare sector in the People's Republic of China (the "PRC"). The Group aims to leverage on investment opportunities in the growing domestic demand for high quality healthcare products in the PRC and build portfolio companies into market sector leaders with competitive edge. Cathay has already demonstrated a track record of identifying investment opportunities in this area including: Lansen, a PRC specialty pharmaceutical company focused on rheumatology and dermatology; Haizi, a PRC inositol manufacturer; 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 1,500 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 has a hotel investment in Shenzhen. For more information please visit the Company's website: http://www.cathay-intl.com.hk.
About Lansen
Lansen, whose shares are listed on the main board of the Hong Kong Stock Exchange, is a 52.83% 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 has established an extensive distribution network, covering more than 1,500 hospitals in four municipalities, 22 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 4.00% 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.