Shanghai Industrial Holdings could net up to $200 million from the spin-off of its Chinese medicine arm on the Growth Enterprise Market (GEM), according to a company official. Shanghai Industrial chief executive Zhou Fumin said SIIC Medical Science and Technology (SIIC MedTech) planned to raise up to $400 million from its initial public offering. Shanghai Industrial would take up to half of that by selling part of its effective 63.3 per cent interest to four strategic investors - Cheung Kong (Holdings), Hutchison Whampoa, Citic Pacific and Sun Hung Kai Properties. SIIC MedTech plans to sell 215.8 million shares, excluding any over-allotment exercise, according to a market source. Of these, 110 million would be new shares, while Shanghai Industrial would dispose of 105.8 million shares. The shares would be in the range of $1.31 to $1.55, representing 11 to 14 times the company's price-earnings multiple. Mr Zhou, who is also chairman of SIIC MedTech, said the spin-off would allow Shanghai Industrial to book a substantial exceptional gain, although he would not say how much. However, co-lead manager BNP Prime Peregrine said the firm could reap an exceptional gain of $54 million to $166 million, depending on the final pricing of the deal. SIIC MedTech would have more than $200 million cash on hand to finance its first-phase business expansion after the offering, according to Mr Zhou.