REG - Hutchmed China Ltd - Overseas Regulatory Announcement

HUTCHMED (China)Announcement

07/12/2023 10:15

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RNS Number : 0348W  Hutchmed (China) Limited  07 December 2023

 

 

Overseas Regulatory Announcement -
Disposal of Interest in Consumer Products Businesses

 

 

HUTCHMED (China) Limited ("HUTCHMED (https://www.hutch-med.com/) ") notes the
below text, which is from an announcement released to the Stock Exchange of
Hong Kong Limited on December 7, 2023 pursuant to Chapters 14 and 14A of the
Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited.

 

 

About HUTCHMED

HUTCHMED (Nasdaq/AIM: HCM; HKEX: 13) is an innovative, commercial-stage,
biopharmaceutical company. It is committed to the discovery and global
development and commercialization of targeted therapies and immunotherapies
for the treatment of cancer and immunological diseases. It has approximately
5,000 personnel across all its companies, at the center of which is a team of
about 1,800 in oncology/immunology. Since inception it has focused on bringing
cancer drug candidates from in-house discovery to patients around the world,
with its first three medicines marketed in China, the first of which is also
marketed in the U.S. For more information, please visit: www.hutch-med.com
(http://www.hutch-med.com/) or follow us on LinkedIn
(https://www.linkedin.com/company/hutchmed/) .

 

 

CONTACTS
 Investor Enquiries                                                +852 2121 8200 / +1 973 306 4490 / ir@hutch-med.com

 Media Enquiries
 Ben Atwell / Alex Shaw, FTI Consulting                            +44 20 3727 1030 / +44 7771 913 902 (Mobile) /
                                                                   +44 7779 545 055 (Mobile) / HUTCHMED@fticonsulting.com
                                                                   (mailto:HUTCHMED@fticonsulting.com)
 Zhou Yi, Brunswick                                                +852 9783 6894 (Mobile) / HUTCHMED@brunswickgroup.com
                                                                   (mailto:HUTCHMED@brunswickgroup.com)

 Nominated Advisor
 Atholl Tweedie / Freddy Crossley / Daphne Zhang, Panmure Gordon   +44 (20) 7886 2500

 

 

 

 

 

 

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong
Limited take no responsibility for the contents of this announcement, make no
representation as to its accuracy or completeness and expressly disclaim any
liability whatsoever for any loss howsoever arising from or in reliance upon
the whole or any part of the contents of this announcement.

 

 

 

 

HUTCHMED (China) Limited

和黃醫藥（中國）有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 13)

 

 

DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTION

IN RELATION TO DISPOSAL OF

INTEREST IN CONSUMER PRODUCTS BUSINESSES

 

 On December 7, 2023, the Seller (a wholly-owned subsidiary of the Company) and
 HWCL (an indirect subsidiary of CK Hutchison) entered into the Share Sale and
 Purchase Agreement relating to the disposal by the Seller of its interest in
 the Consumer Products Businesses for an aggregate purchase price of HK$39.8
 million (US$5.1 million).

 Closing of the Disposal took place on the date of the Share Sale and Purchase
 Agreement.

 
 REASONS FOR, AND BENEFITS OF, THE DISPOSAL

As the core business of the Group is the discovery and global development and
 commercialization of targeted therapies and immunotherapies for the treatment
 of cancer and immunological diseases, the disposal by the Seller of its
 interest in the Consumer Products Businesses will allow the Group to focus
 resources on its core business areas.

 IMPLICATIONS UNDER THE LISTING RULES

 As at the date of this announcement, Hutchison Healthcare Holdings Limited
 holds approximately 38.16% of the shares in the Company. As HWCL is the
 holding company of Hutchison Healthcare Holdings Limited, HWCL is a connected
 person of the Company, and the Disposal constitutes a connected transaction of
 the Company under Chapter 14A of the Listing Rules.

 As one of the applicable percentage ratios (namely, the profits ratio) in
 respect of the Disposal exceeds 5% but all are less than 25%, the Disposal
 constitutes a discloseable transaction for the Company under Chapter 14 of the
 Listing Rules. As one or more of the applicable percentage ratios in respect
 of the Disposal exceed 0.1% but all (other than the profits ratio) are less
 than 5%, the Disposal is subject to the reporting and announcement
 requirements but is exempt from the circular and independent shareholders'
 approval requirements under Chapter 14A of the Listing Rules.

 

 

A.      INTRODUCTION

 

On December 7, 2023, the Seller (a wholly-owned subsidiary of the Company) and
HWCL (an indirect subsidiary of CK Hutchison) entered into the Share Sale and
Purchase Agreement relating to the disposal by the Seller of the Consumer
Products Businesses.

 

B.      THE SHARE SALE AND PURCHASE AGREEMENT

 

The principal terms of the Share Sale and Purchase Agreement are set out
below:

 

Date

 

December 7, 2023

 

Parties

 

(i)       the Seller (as seller); and

 

(ii)      HWCL (as purchaser).

 

Subject Matter

 

The Seller agreed to sell, and HWCL agreed to purchase, all of the shares in
(i) HOIHL, which indirectly holds the Company's 50% interest in its
consolidated joint venture, Hutchison Hain Organic (Hong Kong) Limited, and
(ii) HCPHL, which holds the Company's interest in its indirect wholly-owned
subsidiary, HUTCHMED Science Nutrition Limited, each of which is principally
engaged in wholesale and trading of healthcare and consumer products.

 

Consideration

 

The aggregate purchase price for the Sale Shares is HK$39.8 million (US$5.1
million) and is payable in cash by HWCL.  The purchase price was determined
after arm's length negotiations between the parties with reference to the
Seller's share of the aggregate net asset value of HOIHL and HCPHL as at
October 31, 2023. The aggregate purchase price was paid by HWCL at closing of
the Disposal.

 

Closing

 

Closing of the Disposal took place on the date of the Share Sale and Purchase
Agreement.

 

Immediately before the closing of the Disposal, HOIHL and HCPHL were indirect
wholly-owned subsidiaries of the Company.  Upon closing of the Disposal:

 

(a)      HOIHL and its subsidiaries (including Hutchison Hain Organic
(Hong Kong) Limited) and HCPHL and its subsidiary (being HUTCHMED Science
Nutrition Limited) ceased to be subsidiaries of the Company;

 

(b)      the existing framework products supply and marketing services
agreement entered into between the Company and A.S. Watson (an indirect
subsidiary of CK Hutchison) relating to the supply of products by the Group to
A.S. Watson Group and the associated provision of marketing services and
product labelling services by A.S. Watson Group to the Group will be
terminated; and

 

(c)      the existing products supply agreement entered into between an
indirect subsidiary of HOIHL and Hain Celestial remains in effect but no
longer constitutes transactions of the Group.

 

C.      REASONS FOR, AND BENEFITS OF, THE DISPOSAL

 

As the core business of the Group is the discovery and global development and
commercialization of targeted therapies and immunotherapies for the treatment
of cancer and immunological diseases, the disposal by the Seller of its
interest in the Consumer Products Businesses will allow the Group to focus
resources on its core business areas.

 

The Directors (including independent non-executive Directors) consider that
the Disposal is on normal commercial terms and in the ordinary and usual
course of business of the Group and the terms of the Share Sale and Purchase
Agreement are fair and reasonable and in the interests of the Company and the
Shareholders as a whole.

 

The Company expects to record a gain on disposal of approximately US$0.1
million based on the difference between the aggregate purchase price for the
Sale Shares and the Seller's share of the net asset values of HOIHL and HCPHL.
The actual gain to be recorded by the Company is subject to audit, and
therefore may vary from the amount mentioned above. The Company intends to use
the proceeds from the Disposal in its core business of discovery and global
development and commercialization of targeted therapies and immunotherapies
for the treatment of cancer and immunological diseases.

 

While none of the Directors has any material interest in the Disposal, Mr TO
Chi Keung, Simon, Dr Dan ELDAR and Ms Edith SHIH who are also directors of CK
Hutchison, HWCL or CK Hutchison's related companies voluntarily abstained from
voting on the board resolutions of the Company approving the Disposal.

 

D.      IMPLICATIONS UNDER THE LISTING RULES

 

As at the date of this announcement, Hutchison Healthcare Holdings Limited
holds approximately 38.16% of the shares in the Company. As HWCL is the
holding company of Hutchison Healthcare Holdings Limited, HWCL is a connected
person of the Company, and the Disposal constitutes a connected transaction of
the Company under Chapter 14A of the Listing Rules.

 

As one of the applicable percentage ratios (namely, the profits ratio) in
respect of the Disposal exceeds 5% but all are less than 25%, the Disposal
constitutes a discloseable transaction for the Company under Chapter 14 of the
Listing Rules. As one or more of the applicable percentage ratios in respect
of the Disposal exceed 0.1% but all (other than the profits ratio) are less
than 5%, the Disposal is subject to the reporting and announcement
requirements but is exempt from the circular and independent shareholders'
approval requirements under Chapter 14A of the Listing Rules.

 

E.      INFORMATION ON THE PARTIES, HOIHL AND HCPHL

 

(1)        The Company

 

The Company is an innovative, commercial-stage, biopharmaceutical company. It
is committed to the discovery and global development and commercialization of
targeted therapies and immunotherapies for the treatment of cancer and
immunological diseases. It has approximately 5,000 personnel across all its
companies, at the centre of which is a team of about 1,800 in
oncology/immunology. Since inception, it has focused on bringing cancer drug
candidates from in-house discovery to patients around the world, with its
first three medicines marketed in China, the first of which is also marketed
in the U.S..

 

(2)        HWCL

 

HWCL is a subsidiary of CK Hutchison and is actively engaged in a number of
ventures and other activities in mainland China, Hong Kong and the United
Kingdom. These investments include the provision of aircraft management,
maintenance and engineering, the manufacture and sale of household and
industrial detergent products, the distribution of consumer goods, the
provision of logistics services and the operation of a rice farm and rice
trading.

 

(3)        HOIHL

 

HOIHL is an investment holding company which holds the 50% interest of the
Company in its consolidated joint venture, Hutchison Hain Organic (Hong Kong)
Limited, which is principally engaged in wholesale and trading of healthcare
and consumer products.

 

Based on the unaudited consolidated financial statements of HOIHL prepared in
accordance with International Financial Reporting Standards, the unaudited net
profits before and after taxation of HOIHL for the two years ended December
31, 2021 and 2022 are:

 

                             (unaudited)

                             For the year ended December 31,
                             2021               2022
                             (in US$'000)
 Net profit before taxation  1,931              1,109
 Net profit after taxation   1,623              971

 

The unaudited consolidated net asset value of HOIHL as at October 31, 2023 was
approximately US$9.2 million.

 

(4)        HCPHL

 

HCPHL is an investment holding company which holds the 100% interest of the
Company in HUTCHMED Science Nutrition Limited, which is principally engaged in
wholesale and trading of healthcare and consumer products.

 

Based on the unaudited consolidated financial statements of HCPHL prepared in
accordance with International Financial Reporting Standards, the unaudited net
profits before and after taxation of HCPHL for the two years ended December
31, 2021 and 2022 are:

 

                             (unaudited)

                             For the year ended December 31,
                             2021               2022
                             (in US$'000)
 Net profit before taxation  177                1,160
 Net profit after taxation   182                972

 

The unaudited consolidated net asset value of HCPHL as at October 31, 2023 was
approximately US$0.5 million.

 

F.       DEFINITIONS

 

In this announcement, unless the context otherwise requires, the following
expressions have the following meanings:

 

 "A.S. Watson"                        A.S. Watson Holdings Limited, a company incorporated in the Cayman Islands and
                                      an indirect subsidiary of CK Hutchison

 "A.S. Watson Group"                  A.S. Watson and its subsidiaries

 "CK Hutchison"                       CK Hutchison Holdings Limited, a company incorporated in the Cayman Islands
                                      with limited liability, the shares of which are listed on the Main Board of
                                      the Stock Exchange (stock code: 1)

 "Company"                            HUTCHMED (China) Limited, a company incorporated in the Cayman Islands with
                                      limited liability, the shares of which are listed on the Main Board of the
                                      Stock Exchange (stock code: 13), the AIM market of the London Stock Exchange
                                      (stock code: HCM) and in the form of American depositary shares on the NASDAQ
                                      Global Select Market (ticker symbol: HCM)

 "Consumer Products Businesses"       the 100% interest of the Company in HOIHL (through which the Company
                                      indirectly holds its 50% interest in Hutchison Hain Organic (Hong Kong)
                                      Limited) and the 100% interest of the Company in HCPHL (through which the
                                      Company indirectly holds its 100% interest in HUTCHMED Science Nutrition
                                      Limited)

 "Directors"                          the directors of the Company

 "Disposal"                           the disposal of all of the shares in HOIHL and HCPHL by the Seller to HWCL
                                      pursuant to the Share Sale and Purchase Agreement

 "Group"                              the Company and its subsidiaries

 "Hain Celestial"                     The Hain Celestial Group, Inc., a company incorporated under the laws of the
                                      State of Delaware, which indirectly holds 50% interest in Hutchison Hain
                                      Organic (Hong Kong) Limited

 "HCPHL"                              HUTCHMED Consumer Products Holdings Limited, a company incorporated in the
                                      British Virgin Islands with limited liability

 "HK$"                                Hong Kong dollar, the lawful currency of Hong Kong

 "HOIHL"                              Hutchison Organic Investment Holdings Limited, a company incorporated in the
                                      British Virgin Islands with limited liability

 "Hong Kong"                          the Hong Kong Special Administrative Region of the People's Republic of China

 "HWCL"                               Hutchison Whampoa (China) Limited, a company incorporated in Hong Kong with
                                      limited liability and an indirect subsidiary of CK Hutchison

 "Listing Rules"                      the Rules Governing the Listing of Securities on the Stock Exchange (as
                                      amended and supplemented from time to time)

 "Sale Shares"                        all of the issued shares in each of HOIHL and HCPHL

 "Share Sale and Purchase Agreement"  the share sale and purchase agreement dated December 7, 2023 entered into
                                      between the Seller and HWCL in relation to the Disposal

 "Seller"                             HUTCHMED Group Investment Limited, a company incorporated in the British
                                      Virgin Islands with limited liability and a wholly-owned subsidiary of the
                                      Company

 "Shareholder(s)"                     the holders of the shares of the Company

 "Stock Exchange"                     The Stock Exchange of Hong Kong Limited

 "US$"                                US dollars, the lawful currency of the United States of America

 "%"                                  per cent.

 

 
About HUTCHMED

HUTCHMED (Nasdaq/AIM:HCM; HKEX:13) is an innovative, commercial-stage,
biopharmaceutical company. It is committed to the discovery and global
development and commercialization of targeted therapies and immunotherapies
for the treatment of cancer and immunological diseases. It has approximately
5,000 personnel across all its companies, at the center of which is a team of
about 1,800 in oncology/immunology. Since inception it has focused on bringing
cancer drug candidates from in-house discovery to patients around the world,
with its first three medicines marketed in China, the first of which is also
marketed in the U.S.. For more information, please visit: www.hutch-med.com
(http://www.hutch-med.com/) or follow us on LinkedIn
(https://www.linkedin.com/company/hutchmed/) .

 

Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of
the "safe harbor" provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These forward-looking statements reflect HUTCHMED's current
expectations regarding future events, including its expectations as to the
intended use of proceeds. Forward-looking statements involve risks and
uncertainties. Such risks and uncertainties include, among other thing, the
impact of the COVID-19 on general economic, regulatory and political
conditions. Existing and prospective investors are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. For further discussion of these and other risks, see HUTCHMED's
filings with the U.S. Securities and Exchange Commission and on AIM. HUTCHMED
undertakes no obligation to update or revise the information contained in this
announcement, whether as a result of new information, future events or
circumstances or otherwise.

 

By Order of the Board

Edith Shih
Non-executive Director and Company Secretary

 

Hong Kong, December 7, 2023

 

As at the date of this announcement, the Directors of the Company are:

 

 Executive Directors:           Non-executive Directors:

 Mr TO Chi Keung, Simon         Dr Dan ELDAR

(Chairman)

                              Ms Edith SHIH
 Dr Weiguo SU

(Chief Executive Officer and  Ms Ling YANG

Chief Scientific Officer)

 Mr CHENG Chig Fung, Johnny

(Chief Financial Officer)     Independent Non-executive Directors:

                                Mr Paul Rutherford CARTER

(Senior Independent Director)

                                Mr Graeme Allan JACK

                                Professor MOK Shu Kam, Tony

 

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