27 Dec 2017 12:39
Cathay International Holdings Limited
("Cathay" or the "Company" or the "Group")
Update on Settlement of A Litigation against Lansen's subsidiary in Ningbo, the PRC
Hong Kong, 27 December 2017 - 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"), today announces that, Lansen Pharmaceutical Holdings Ltd ("Lansen") (HKEX: 503), the Company's 50.56% owned subsidiary, has made a regulatory announcement in accordance with the requirements of its Hong Kong listing.
The board of directors of Lansen has informed its shareholders and potential investors that reference is made to the announcements of Lansen dated 6 July 2015 and 1 September 2017 in relation to a legal proceeding (the "Litigation") initiated by Neptunus Medicine Company Limited (the "Claimant") against Ningbo Liwah Pharmaceutical Company Limited ("Ningbo Liwah"), a wholly owned subsidiary of Lansen. In the Litigation, the Claimant alleged that it had suffered certain losses due to the use of ginkgo extract supplied by Ningbo Liwah in the Claimant's products. The Claimant sought damages of approximately RMB70 million (approximately USD10.65 million) from Ningbo Liwah, as well as relevant legal fees. On 1 September 2017, Ningbo Liwah received a judgment delivered by Shenzhen Intermediate People's Court of the PRC which ruled in favour of the Claimant. As such, Ningbo Liwah was ordered to pay damages to the Claimant in the amount of approximately RMB30 million (approximately USD4.57 million), after setting off of the account receivables of approximately RMB4.3 million (approximately USD0.7 million) due from the Claimant and to bear the legal costs of approximately RMB0.2 million (approximately USD0.03 million).
On 27 December 2017, Ningbo Liwah entered into a settlement agreement with the Claimant, of which Ningbo Liwah agreed to pay the Claimant in the amount of RMB26 million (approximately USD4.0 million) after setting off the account receivables of approximately RMB4.3 million (approximately USD0.7 million) due from the Claimant. The compensation to the Claimant shall be paid by two instalments (1) RMB15.6 million (approximately USD2.4 million) to be paid on or before 31 January 2018 and (2) RMB10.4 million (approximately USD1.6 million) to be paid within six months after the signing date of the settlement agreement. The amount of the compensation will be reflected in the profit and loss accounts of Lansen group for the financial year of 2017 but is expected to have minimum impact on Lansen group's cashflow and Lansen group's business development.
The full text of the Lansen Announcement can be found at the Announcements & Notices section of Lansen's homepage at http://holding.lansen.com.cn/en/newslist.aspx?NodeCode=10002000700050005.
-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 growing healthcare sector in the People's Republic of China (the "PRC"). The Company and its subsidiaries (collectively the "Group") aim to leverage on growth opportunities in the strong and growing domestic demand for high quality healthcare products in the PRC and build its portfolio companies into market sector leaders with 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 2,000 people across the PRC, including over 30 specialist corporate and business development staff based at the holding company's offices in Hong Kong and Shenzhen. Cathay also has a hotel investment. For more information please visit the Company's website: http://www.cathay-intl.com.hk.
About Lansen
Lansen, whose shares are listed on the mainboard 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 the 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: http://www.lansen.com.cn/en/index.aspx.