• Fri
  • Apr 18, 2014
  • Updated: 12:14pm

Shanghai Industrial to reshuffle drugs assets

PUBLISHED : Thursday, 17 May, 2007, 12:00am
UPDATED : Thursday, 17 May, 2007, 12:00am

Red-chip conglomerate Shanghai Industrial Holdings plans to sell 1.51 billion yuan worth of pharmaceutical assets to its Shanghai-listed unit in a move to group all related businesses under a single platform.


Shanghai Industrial, an investment arm of the municipal government, will receive 46.77 million A shares at 14.13 yuan each in its unit, Shanghai Industrial Pharmaceutical Investment, as part of the return from the asset sale.


The drug unit would sell an additional 60.45 million shares to institutional investors to fund the purchase. Shanghai Industrial's stake in the unit will remain unchanged at 43.62 per cent after the deal.


Shares in the Shanghai Industrial Pharmaceutical surged their 10 per cent daily limit to close at 20 yuan yesterday. Shares in Shanghai Industrial rose 2.6 per cent to HK$23.70.


The assets to be injected include stakes in five companies engaged in the making of Chinese medicine and drugstore operation. The businesses have a combined net asset value of 506 million yuan.


The restructuring could help streamline the company's structure and raise additional funds, Shanghai Industrial said.


Net proceeds raised from the asset sale would be used for general working capital and potential acquisitions, it said.


The company also expected to reap a pre-tax profit of 164 million from the deal.


Shanghai Industrial Pharmaceutical said its net profit would have doubled to 230 million yuan last year assuming the acquisition was completed on January 1 last year.


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