REG - Hutchmed China Ltd - Overseas Regulatory Announcement
03/03/2025 07:15
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RNS Number : 9837Y Hutchmed (China) Limited 03 March 2025
Overseas Regulatory Announcement -
Update on Transaction
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 March 2, 2025 pursuant to Chapter 14 of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited.
The announcement provides an update on the proposed divestment of HUTCHMED's
45% equity interest in Shanghai Hutchison Pharmaceuticals Limited ("SHPL") as
described in the RNS announcements dated January 2, 2025. As previously
announced, the transaction includes the proposed disposal of shares
representing a 35% equity interest in SHPL to GP Health Service Capital Co.,
Ltd ("GP Health Service Capital"), which in turn has the right to designate
(i) a party to purchase no more than 10% equity interest in SHPL, and (ii) a
fund established by GP Health Service Capital as manager and one of the
general partners to purchase the remaining shares.
The below text describes the investment funds that have been designated by GP
Health Service Capital, and provides an update on the date when the
Extraordinary General Meeting Circular is expected to be dispatched to
shareholders.
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. Since inception it has
focused on bringing 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 approved in the US, Europe and Japan. For more information,
please visit: www.hutch‑med.com (https://www.hutch-med.com/) or follow us on
LinkedIn (https://www.linkedin.com/company/hutchmed/) .
CONTACTS
Investor Enquiries +852 2121 8200 / ir@hutch-med.com (mailto:ir@hutch-med.com)
Media Enquiries
FTI Consulting - +44 20 3727 1030 / HUTCHMED@fticonsulting.com
(mailto:HUTCHMED@fticonsulting.com)
Ben Atwell / Alex Shaw +44 7771 913 902 (Mobile) / +44 7779 545 055 (Mobile)
Brunswick - Zhou Yi +852 9783 6894 (Mobile) / HUTCHMED@brunswickgroup.com
(mailto:HUTCHMED@brunswickgroup.com)
Panmure Liberum Nominated Advisor and Joint Broker
Atholl Tweedie / Freddy Crossley / Rupert Dearden +44 20 7886 2500
HSBC Joint Broker
Simon Alexander / Alina Vaskina / Arnav Kapoor +44 20 7991 8888
Cavendish Joint Broker
Geoff Nash / Nigel Birks +44 20 7220 0500
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)
MAJOR TRANSACTION
IN RELATION TO
THE DISPOSAL OF 45% EQUITY INTEREST IN
SHANGHAI HUTCHISON PHARMACEUTICALS LIMITED
DESIGNATION OF PURCHASERS
Reference is made to the announcement of HUTCHMED (China) Limited (the
"Company") dated January 1, 2025 (the "Announcement") in relation to the
proposed disposal of the GP Health Sale Shares (representing 35% equity
interest in SHPL) to GP Health Service Capital pursuant to the GP Health SPA
and the proposed disposal of the Shanghai Pharma Sale Shares (representing 10%
equity interest in SHPL) to Shanghai Pharma pursuant to the Shanghai Pharma
SPA. Unless otherwise defined, capitalized terms used in this announcement
shall have the same meanings as those defined in the Announcement.
As disclosed in the Announcement, on December 31, 2024, the Seller (a
wholly-owned subsidiary of the Company) entered into:
(i) the GP Health SPA with GP Health Service Capital relating
to the disposal by the Seller of the GP Health Sale Shares, representing 35%
equity interest in SHPL; and
(ii) the Shanghai Pharma SPA with Shanghai Pharma relating to
the disposal by the Seller of the Shanghai Pharma Sale Shares, representing
10% equity interest in SHPL.
Pursuant to the GP Health SPA, subject to the prior written consent by the
Seller, GP Health Service Capital has the right to designate (i) a designated
party to purchase no more than 10% equity interest in SHPL from the GP Health
Sale Shares (i.e. the Designated Purchaser upon designation), and (ii) a fund
established by GP Health Service Capital as manager and one of the general
partners to purchase the remaining GP Health Sale Shares (i.e. the GP
Purchaser Fund upon designation), subject to various conditions as disclosed
in the Announcement.
On February 28, 2025, pursuant to the GP Health SPA, GP Health Service Capital
designated GP Zhicheng Private Equity Investment Fund Partnership (Limited
Partnership)* (上海金浦志誠私募投資基金合夥企業(有限合夥))
(as the GP Purchaser Fund) and Shanghai GP Zhibaihe Enterprise Management
Partnership (Limited Partnership)*
(上海金浦志佰合企業管理合夥企業(有限合夥)) (as the
Designated Purchaser) to purchase 25.1247% and 9.8753% equity interest in
SHPL, respectively, together representing all of the GP Health Sale Shares.
In connection with such designation, the Seller entered into:
(i) the GP Purchaser Fund SPA with the GP Purchaser Fund in
relation to the sale and purchase of the GP Purchaser Fund Sale Shares,
representing 25.1247% equity interest in SHPL;
(ii) the GP Health Agreement 1 with GP Health Service Capital
in connection with the sale and purchase of the GP Purchaser Fund Sale Shares
pursuant to the GP Purchaser Fund SPA;
(iii) the Designated Purchaser SPA with the Designated Purchaser
in relation to the sale and purchase of the Designated Purchaser Sale Shares,
representing 9.8753% equity interest in SHPL;
(iv) the GP Health Agreement 2 with GP Health Service Capital in
connection with the sale and purchase of the Designated Purchaser Sale Shares
pursuant to the Designated Purchaser SPA;
(v) the GP Health Supplemental SPA with GP Health Service
Capital in relation to the termination of the GP Health SPA; and
(vi) the Shanghai Pharma Supplemental SPA with Shanghai Pharma
in relation to consequential amendments to the Shanghai Pharma SPA.
1. THE GP PURCHASER FUND SPA
Pursuant to the GP Health SPA, the Seller and GP Purchaser Fund entered into
the GP Purchaser Fund SPA in relation to the sale and purchase of the GP
Purchaser Fund Sale Shares, representing 25.1247% of the equity interest in
SHPL. The terms of the GP Purchaser Fund SPA are substantially the same as the
terms of the GP Health SPA (save for the right to designate other purchasers
as described in the Announcement).
The principal terms of the GP Purchaser Fund SPA are set out below:
Date
February 28, 2025
Parties
(i) the Seller (as seller); and
(ii) GP Purchaser Fund (as purchaser).
To the best of the Directors' knowledge, information and belief having made
all reasonable enquiries, GP Purchaser Fund and its ultimate beneficial owners
are third parties independent of the Company and its connected persons.
Subject Matter
The Seller agreed to sell, and GP Purchaser Fund agreed to purchase, the GP
Purchaser Fund Sale Shares, representing 25.1247% equity interest in SHPL.
Consideration
The aggregate purchase price for the GP Purchaser Fund Sale Shares is
RMB2,500,000,000 (approximately US$339.7 million). The aggregate purchase
price (after deducting withholding tax) is payable in cash by GP Purchaser
Fund to an escrow account on the date of Closing. Upon the obtaining of all
necessary approvals from relevant government authorities after the date of
Closing, the aggregate purchase price (after deducting withholding tax) paid
by GP Purchaser Fund will be released for remittance to an offshore bank
account designated by the Seller.
The purchase price was determined by the Group after arm's length negotiations
between the Seller and GP Purchaser Fund with reference to the purchase price
of the GP Health Sale Shares under the GP Health SPA and the proportion of
SHPL's consolidated net profit for the year ended December 31, 2023 (in its
functional currency) attributable to the GP Purchaser Fund Sale Shares
multiplied by the agreed multiple of 15 times (which was determined by
reference to the trading multiples of twenty comparable businesses principally
engaged in the development, manufacturing and sale of pharmaceutical and
healthcare products in the PRC, assumptions on SHPL's future growth prospects
and financial performance and the commercial negotiations between the parties)
and translated into US dollars.
Profit Compensation
(i) Interim Profit Compensation
In the event that the actual net profit of SHPL for any year during the Profit
Guarantee Period of the year ended December 31, 2024 and the years ending
December 31, 2025, 2026 and 2027 (the "Actual Net Profit") is lower than the
guaranteed net profit for the year of RMB663.0 million, RMB696.5 million,
RMB731.0 million and RMB767.5 million respectively (the "Guaranteed Net
Profit"), within 30 Business Days from the date when the annual audit report
of SHPL for the respective year is issued, the Seller is required to provide
interim profit compensation to GP Purchaser Fund (the "GP Purchaser Fund
Interim Profit Compensation") in cash, in the amount calculated as follows:
A x (B - C)
in which "A" refers to the equity interest purchased by GP Purchaser Fund
pursuant to the GP Purchaser Fund SPA, "B" refers to the Guaranteed Net Profit
for the year, and "C" refers to the Actual Net Profit for the year.
(ii) Cumulative Profit Compensation
In the event that the actual cumulative net profit of SHPL for the Profit
Guarantee Period (the "Actual Cumulative Net Profit") is lower than the
guaranteed cumulative net profit of RMB2,858 million (the "Guaranteed
Cumulative Net Profit"), within 30 Business Days from the date when the annual
audit report for the year ending December 31, 2027 of SHPL is issued, the
Seller is required to provide cumulative profit compensation to GP Purchaser
Fund (the "GP Purchaser Fund Cumulative Profit Compensation"), which may be
settled in cash or in the form of equity interests in SHPL.
If the Seller settles the GP Purchaser Fund Cumulative Profit Compensation in
cash, the amount will be calculated as follows:
A x (B / C -1) - D
in which "A" refers to the aggregate purchase price paid by GP Purchaser Fund
(i.e. RMB2,500,000,000), "B" refers to the Guaranteed Cumulative Net Profit,
"C" refers to the Actual Cumulative Net Profit and "D" refers to any GP
Purchaser Fund Interim Profit Compensation already paid.
The Seller and GP Purchaser Fund will further agree in writing in respect of
any settlement of GP Purchaser Fund Cumulative Profit Compensation in the form
of the transfer of equity interests in SHPL (or any other forms).
If the Seller and GP Purchaser Fund agree on the settlement of the GP
Purchaser Fund Cumulative Profit Compensation amount in the form of the
transfer of equity interests in SHPL, the equity interest percentage to be
transferred by the Seller to GP Purchaser Fund will be calculated as follows:
A x (B / C -1) x (1 - D / E)
in which "A" refers to the equity interest purchased by GP Purchaser Fund
pursuant to the GP Purchaser Fund SPA, "B" refers to the Guaranteed Cumulative
Net Profit, "C" refers to the Actual Cumulative Net Profit, "D" refers to any
GP Purchaser Fund Interim Profit Compensation already paid and any GP
Purchaser Fund Cumulative Profit Compensation already settled in cash, and "E"
refers to the amount of GP Purchaser Fund Cumulative Profit Compensation to be
settled in cash before deduction of any GP Purchaser Fund Interim Profit
Compensation already paid. As any settlement of the GP Purchaser Fund
Cumulative Profit Compensation in the form of a transfer of equity interests
in SHPL is subject to agreement by the Seller, the equity interests to be
transferred for any such settlement will not exceed the equity interests held
by the Seller at the relevant time. The Company will comply with the
applicable requirements of the Listing Rules and the AIM Rules for Companies
at the relevant time with respect to any such transfer.
The Guaranteed Net Profit was determined based on an assumption of
approximately 5% growth in the net profit of SHPL compared to the previous
year for the years ending December 31, 2025, 2026 and 2027. The Guaranteed
Cumulative Net Profit is the sum of the Guaranteed Net Profit for each of the
years ended/ending December 31, 2024, 2025, 2026 and 2027.
The Seller shall provide the GP Purchaser Fund Interim Profit Compensation
and/or the GP Purchaser Fund Cumulative Profit Compensation to GP Purchaser
Fund within 30 Business Days from the determination of the GP Purchaser Fund
Interim Profit Compensation and/or the GP Purchaser Fund Cumulative Profit
Compensation, except that if internal procedures including obtaining necessary
shareholders' approval are required then the time required for such procedures
will not count towards the 30 Business Days, but in any event the compensation
shall be paid no later than 45 Business Days from the determination of the GP
Purchaser Fund Interim Profit Compensation and/or the GP Purchaser Fund
Cumulative Profit Compensation or such date as mutually agreed by the Seller
and GP Purchaser Fund.
Any GP Purchaser Fund Interim Profit Compensation and/or GP Purchaser Fund
Cumulative Profit Compensation payable by the Seller during the Profit
Guarantee Period will first be offset against the Seller's portion of the
undistributed profit or loss of SHPL prior to Closing. Please refer to "-
Pre-Closing Profit or Loss Allocation" below for further details.
The aggregate cash-equivalent amount of the GP Purchaser Fund Interim Profit
Compensation and the GP Purchaser Fund Cumulative Profit Compensation payable
to GP Purchaser Fund will not exceed RMB500 million.
Operation and Management of SHPL during the Transition Period
The Seller and GP Purchaser Fund have agreed that during the Transition
Period, the Seller has the right to recommend the general manager of SHPL (who
is the core management personnel responsible for all production operation and
management activities of SHPL) for nomination by Shanghai Pharma and
appointment by the board of directors of SHPL. In addition, the board of
directors of SHPL has approved the financial budget for the year ending
December 31, 2025 and the principles of the financial budget for the years
ending December 31, 2026 and 2027, including the targets for net profit of
SHPL which are no less than the Guaranteed Net Profit.
Distribution of Retained Earnings of SHPL
On the date of Closing, the shareholders of SHPL will approve the distribution
of retained earnings as of October 31, 2024 of SHPL in the following manner:
(i) on the date of Closing, retained earnings in the amount of
RMB414 million will be declared and become the entitlement of the existing
shareholders of SHPL, being the Seller and Shanghai TCM, in proportion to
their respective shareholding percentage in SHPL before Closing (the
"Attributed Retained Earnings"); and
(ii) on the date of Closing, the remaining undistributed
retained earnings in the amount of RMB423 million will be declared and become
the entitlement of the then shareholders of SHPL immediately after Closing in
proportion to their respective shareholding percentage in SHPL, and will be
distributed to the then shareholders of SHPL no later than September 30, 2025.
Pre-Closing Profit or Loss Allocation
On the date of Closing, the shareholders of SHPL will approve the allocation
of profits or losses prior to Closing in the following manner:
(i) the profits or losses generated by SHPL during the period
between November 1, 2024 and the earlier of (a) the date of Closing and (b)
March 31, 2025 will be declared and become the entitlement of the existing
shareholders of SHPL, being the Seller and Shanghai TCM, in proportion to
their respective shareholding percentage in SHPL before Closing; and
(ii) the profits or losses generated by SHPL during the period
between April 1, 2025 and the date of Closing (if any) will be declared and
become the entitlement of the then shareholders of SHPL immediately after
Closing in proportion to their respective shareholding percentage in SHPL
(collectively, the "Attributed Profit or Loss").
Adjustable Retained Dividends
RMB226,122,343 of the Seller's portion of the Attributed Retained Earnings and
the Attributed Profit or Loss will be retained by SHPL as adjustable retained
dividends (the "GP Purchaser Fund Seller's Adjustable Retained Dividends"). If
the Seller is required to provide any GP Purchaser Fund Interim Profit
Compensation or GP Purchaser Fund Cumulative Profit Compensation during the
Profit Guarantee Period, the amount equivalent to the GP Purchaser Fund
Interim Profit Compensation or GP Purchaser Fund Cumulative Profit
Compensation payable will be deducted from the GP Purchaser Fund Seller's
Adjustable Retained Dividends and be distributed to GP Purchaser Fund
instead.
After the Profit Guarantee Period and the due settlement of any GP Purchaser
Fund Interim Profit Compensation or GP Purchaser Fund Cumulative Profit
Compensation by the Seller, the GP Purchaser Fund Seller's Adjustable Retained
Dividends (subject to any adjustment referred to above) will be distributed to
the Seller by no later than December 31, 2028.
Board Composition of SHPL
Following Closing, the board of directors of SHPL will consist of seven
directors, of which (i) Shanghai Pharma and Shanghai TCM collectively have the
right to nominate four directors, (ii) GP Purchaser Fund has the right to
nominate two directors, and (iii) the Seller has the right to nominate one
director.
Conditions
(1) Conditions to obligations of both the Seller and GP
Purchaser Fund
The obligations of both the Seller and GP Purchaser Fund under the GP
Purchaser Fund SPA are conditional upon (i) the simultaneous Closing of the
Shanghai Pharma SPA and the Designated Purchaser SPA, (ii) the Company having
obtained all necessary internal approvals and shareholders' approval with
respect to the GP Purchaser Fund SPA, and (iii) GP Purchaser Fund having
obtained the necessary government approvals and completed the necessary
governmental registrations.
As of the date of this announcement, the Company has obtained all necessary
internal approvals with respect to the GP Purchaser Fund SPA.
(2) Conditions to the Seller's obligation to sell
The Seller's obligation to sell under the GP Purchaser Fund SPA is also
conditional on the satisfaction or waiver (as applicable) of certain
conditions, including (i) GP Purchaser Fund having obtained antitrust
approvals, if applicable, (ii) GP Purchaser Fund having obtained all necessary
internal approvals, (iii) the agreement among the then shareholders of SHPL
immediately after Closing on arrangements concerning SHPL such as corporate
governance, business development and shareholders' rights during the
Transition Period, (iv) the agreement among the then shareholders of SHPL
immediately after Closing on the distribution of retained earnings as of
October 31, 2024 of SHPL and the allocation of profits or losses generated by
SHPL prior to Closing, and (v) GP Purchaser Fund having demonstrated it has
sufficient funds to settle the purchase price and complete the transaction. GP
Purchaser Fund undertook to use its best endeavors to satisfy such conditions
as soon as possible after the date of the GP Purchaser Fund SPA.
(3) Conditions to GP Purchaser Fund's obligation to purchase
GP Purchaser Fund's obligation to purchase under the GP Purchaser Fund SPA is
also conditional on the satisfaction or waiver (as applicable) of certain
conditions, including (i) the Seller having obtained all necessary internal
approvals, (ii) the agreement among the then shareholders of SHPL immediately
after Closing on arrangements concerning SHPL such as corporate governance,
business development and shareholders' rights during the Transition Period,
(iii) the agreement among the then shareholders of SHPL immediately after
Closing on the distribution of retained earnings as of October 31, 2024 of
SHPL and the allocation of profits or losses generated by SHPL prior to
Closing, and (iv) there being no occurrence of events that could have any
material adverse impact on SHPL and its development prospects.
As of the date of this announcement, condition (i) has been satisfied.
Closing
Within two Business Days after the satisfaction or waiver (as applicable) of
the conditions (other than conditions which can only be satisfied at Closing
by nature), GP Purchaser Fund will initiate, and complete on a best effort
basis, the declaration of withholding taxes to the relevant tax authorities.
Closing will take place (i) on the third Business Day after the issuance of
certificate for withholding taxes by the relevant tax authorities; or (ii)
such other date as may be agreed by the Seller and GP Purchaser Fund.
Termination
The Seller and GP Purchaser Fund both have the right to terminate the GP
Purchaser Fund SPA if any of the conditions are not satisfied or waived (as
applicable) by the Longstop Date, provided that the failure to satisfy such
condition is not caused by or resulted from the failure of such party to
perform any obligation under the GP Purchaser Fund SPA and not within the
control of such party.
The Seller is entitled to unilaterally terminate the GP Purchaser Fund SPA
prior to Closing by written notice to GP Purchaser Fund in the event that GP
Purchaser Fund fails to pay the purchase price for GP Purchaser Fund Sale
Shares or settle the payment of withholding taxes in accordance with the GP
Purchaser Fund SPA and fails to remedy such failure. The Seller and GP
Purchaser Fund are also entitled to unilaterally terminate the GP Purchaser
Fund SPA if the other party materially breaches its warranties or other
covenants or obligations under the GP Purchaser Fund SPA and fails to remedy
such breach.
2. THE GP HEALTH AGREEMENT 1
On February 28, 2025, the Seller and GP Health Service Capital entered into
the GP Health Agreement 1 in connection with the sale and purchase of the GP
Purchaser Fund Sale Shares pursuant to the GP Purchaser Fund SPA.
The Seller and GP Health Service Capital agreed that:
(1) GP Health Service Capital will (i) complete the industrial
and commercial registration with the relevant regulatory authorities in
relation to GP Purchaser Fund's committed registered capital reaching the
amount of RMB2,501,100,000, which GP Health Service Capital expects to be
completed on or before March 31, 2025 (or such other date as mutually agreed
between the parties), and (ii) provide the Seller with information on the
capital contributions of GP Purchaser Fund, including the list of partners and
the capital contribution amount, proportions and methods;
(2) after the completion of industrial and commercial
registration in relation to GP Purchaser Fund's registered capital amount and
the provision of information to the Seller as described in (1) above, GP
Health Service Capital will procure GP Purchaser Fund purchases the GP
Purchaser Fund Sale Shares in accordance with the GP Purchaser Fund SPA;
(3) unless agreed by the Seller in writing, GP Health Service
Capital and GP Purchaser Fund will not further transfer to any other party
their rights and obligations under the GP Health Agreement 1 and the GP
Purchaser Fund SPA; and
(4) GP Health Service Capital will ensure GP Purchaser Fund to
agree with necessary amendments or termination of the GP Purchaser Fund SPA
according to agreed transaction arrangements.
3. THE DESIGNATED PURCHASER SPA
Pursuant to the GP Health SPA, the Seller and the Designated Purchaser entered
into the Designated Purchaser SPA in relation to the sale and purchase of the
Designated Purchaser Sale Shares, representing 9.8753% of the equity interest
in SHPL. The terms of the Designated Purchaser SPA are substantially the same
as the terms of the GP Health SPA (save for the right to designate other
purchasers as described in the Announcement).
The principal terms of the Designated Purchaser SPA are set out below:
Date
February 28, 2025
Parties
(i) the Seller (as seller); and
(ii) the Designated Purchaser (as purchaser).
To the best of the Directors' knowledge, information and belief having made
all reasonable enquiries, the Designated Purchaser and its ultimate beneficial
owners are third parties independent of the Company and its connected persons.
Subject Matter
The Seller agreed to sell, and the Designated Purchaser agreed to purchase,
the Designated Purchaser Sale Shares, representing 9.8753% equity interest in
SHPL.
Consideration
The aggregate purchase price for the Designated Purchaser Sale Shares is
RMB982,627,982 (approximately US$133.5 million). The aggregate purchase price
(after deducting withholding tax) is payable in cash by the Designated
Purchaser to an escrow account on the date of Closing. Upon the obtaining of
all necessary approvals from relevant government authorities after the date of
Closing, the aggregate purchase price (after deducting withholding tax) paid
by the Designated Purchaser will be released for remittance to an offshore
bank account designated by the Seller.
The purchase price was determined by the Group after arm's length negotiations
between the Seller and the Designated Purchaser with reference to the purchase
price of the GP Health Sale Shares under the GP Health SPA and the proportion
of SHPL's consolidated net profit for the year ended December 31, 2023 (in its
functional currency) attributable to the Designated Purchaser Sale Shares
multiplied by the agreed multiple of 15 times (which was determined by
reference to the trading multiples of twenty comparable businesses principally
engaged in the development, manufacturing and sale of pharmaceutical and
healthcare products in the PRC, assumptions on SHPL's future growth prospects
and financial performance and the commercial negotiations between the parties)
and translated into US dollars.
Profit Compensation
(i) Interim Profit Compensation
In the event that the Actual Net Profit of SHPL for any year during the Profit
Guarantee Period is lower than the Guaranteed Net Profit for the year, within
30 Business Days from the date when the annual audit report of SHPL for the
respective year is issued, the Seller is required to provide interim profit
compensation to the Designated Purchaser (the "Designated Purchaser Interim
Profit Compensation") in cash, in the amount calculated as follows:
A x (B - C)
in which "A" refers to the equity interest purchased by the Designated
Purchaser pursuant to the Designated Purchaser SPA, "B" refers to the
Guaranteed Net Profit for the year, and "C" refers to the Actual Net Profit
for the year.
(ii) Cumulative Profit Compensation
In the event that the Actual Cumulative Net Profit of SHPL for the Profit
Guarantee Period is lower than the Guaranteed Cumulative Net Profit, within 30
Business Days from the date when the annual audit report for the year ending
December 31, 2027 of SHPL is issued, the Seller is required to provide
cumulative profit compensation to the Designated Purchaser (the "Designated
Purchaser Cumulative Profit Compensation"), which may be settled in cash or in
the form of equity interests in SHPL.
If the Seller settles the Designated Purchaser Cumulative Profit Compensation
in cash, the amount will be calculated as follows:
A x (B / C -1) - D
in which "A" refers to the aggregate purchase price paid by the Designated
Purchaser (i.e. RMB982,627,982), "B" refers to the Guaranteed Cumulative Net
Profit, "C" refers to the Actual Cumulative Net Profit and "D" refers to any
Designated Purchaser Interim Profit Compensation already paid.
The Seller and the Designated Purchaser will further agree in writing in
respect of any settlement of Designated Purchaser Cumulative Profit
Compensation in the form of the transfer of equity interests in SHPL (or any
other forms).
If the Seller and the Designated Purchaser agree on the settlement of the
Designated Purchaser Cumulative Profit Compensation amount in the form of the
transfer of equity interests in SHPL, the equity interest percentage to be
transferred by the Seller to the Designated Purchaser will be calculated as
follows:
A x (B / C -1) x (1 - D / E)
in which "A" refers to the equity interest purchased by the Designated
Purchaser pursuant to the Designated Purchaser SPA, "B" refers to the
Guaranteed Cumulative Net Profit, "C" refers to the Actual Cumulative Net
Profit, "D" refers to any Designated Purchaser Interim Profit Compensation
already paid and any Designated Purchaser Cumulative Profit Compensation
already settled in cash, and "E" refers to the amount of Designated Purchaser
Cumulative Profit Compensation to be settled in cash before deduction of any
Designated Purchaser Interim Profit Compensation already paid. As any
settlement of the Designated Purchaser Cumulative Profit Compensation in the
form of a transfer of equity interests in SHPL is subject to agreement by the
Seller, the equity interests to be transferred for any such settlement will
not exceed the equity interests held by the Seller at the relevant time. The
Company will comply with the applicable requirements of the Listing Rules and
the AIM Rules for Companies at the relevant time with respect to any such
transfer.
The Guaranteed Net Profit was determined based on an assumption of
approximately 5% growth in the net profit of SHPL compared to the previous
year for the years ending December 31, 2025, 2026 and 2027. The Guaranteed
Cumulative Net Profit is the sum of the Guaranteed Net Profit for each of the
years ended/ending December 31, 2024, 2025, 2026 and 2027.
The Seller shall provide the Designated Purchaser Interim Profit Compensation
and/or the Designated Purchaser Cumulative Profit Compensation to the
Designated Purchaser within 30 Business Days from the determination of the
Designated Purchaser Interim Profit Compensation and/or the Designated
Purchaser Cumulative Profit Compensation, except that if internal procedures
including obtaining necessary shareholders' approval are required then the
time required for such procedures will not count towards the 30 Business Days,
but in any event the compensation shall be paid no later than 45 Business Days
from the determination of the Designated Purchaser Interim Profit Compensation
and/or the Designated Purchaser Cumulative Profit Compensation or such date as
mutually agreed by the Seller and the Designated Purchaser.
Any Designated Purchaser Interim Profit Compensation and/or Designated
Purchaser Cumulative Profit Compensation payable by the Seller during the
Profit Guarantee Period will first be offset against the Seller's portion of
the undistributed profit or loss of SHPL prior to Closing. Please refer to "-
Pre-Closing Profit or Loss Allocation" below for further details.
The aggregate cash-equivalent amount of the Designated Purchaser Interim
Profit Compensation and the Designated Purchaser Cumulative Profit
Compensation payable to the Designated Purchaser will not exceed RMB196
million.
Operation and Management of SHPL during the Transition Period
The Seller and the Designated Purchaser agreed on the same arrangements
concerning the operation and management of SHPL during the Transition Period
under the GP Purchaser Fund SPA. Please refer to the section headed "2. The GP
Purchaser Fund SPA - Operation and Management of SHPL during the Transition
Period" above for details.
Distribution of Retained Earnings of SHPL
The Seller and the Designated Purchaser agreed on the same arrangements
concerning the distribution of retained earnings as of October 31, 2024 of
SHPL under the GP Purchaser Fund SPA. Please refer to the section headed "2.
The GP Purchaser Fund SPA - Distribution of Retained Earnings of SHPL" above
for details.
Pre-Closing Profit or Loss Allocation
The Seller and the Designated Purchaser agreed on the same arrangements
concerning the allocation of profits or losses generated by SHPL prior to
Closing under the GP Purchaser Fund SPA. Please refer to the section headed
"2. The GP Purchaser Fund SPA - Pre-Closing Profit or Loss Allocation" above
for details.
Adjustable Retained Dividends
The Seller and the Designated Purchaser agreed on the same arrangements
concerning the retention of the Seller's portion of the Attributed Retained
Earnings and the Attributed Profit or Loss as adjustable retained dividends
under the GP Purchaser Fund SPA, except (i) the agreed amount to be retained
is RMB88,877,657 (the "Designated Purchaser Seller's Adjustable Retained
Dividends"), and (ii) if the Seller is required to provide any Designated
Purchaser Interim Profit Compensation or Designated Purchaser Cumulative
Profit Compensation to the Designated Purchaser during the Profit Guarantee
Period, the amount equivalent to the Designated Purchaser Interim Profit
Compensation or Designated Purchaser Cumulative Profit Compensation payable
will be deducted from the Designated Purchaser Seller's Adjustable Retained
Dividends and be distributed to the Designated Purchaser instead. Please refer
to the section headed "2. The GP Purchaser Fund SPA - Adjustable Retained
Dividends" above for details.
Board Composition of SHPL
Following Closing, the board of directors of SHPL will consist of seven
directors, of which (i) Shanghai Pharma and Shanghai TCM collectively have the
right to nominate four directors, (ii) GP Purchaser Fund has the right to
nominate two directors, and (iii) the Seller has the right to nominate one
director.
Conditions
(1) Conditions to obligations of both the Seller and the
Designated Purchaser
The obligations of both the Seller and the Designated Purchaser under the
Designated Purchaser SPA are conditional upon (i) the simultaneous Closing of
the Shanghai Pharma SPA and the GP Purchaser Fund SPA, and (ii) the Company
having obtained all necessary internal approvals and shareholders' approval
with respect to the Designated Purchaser SPA.
As of the date of this announcement, the Company has obtained all necessary
internal approvals with respect to the Designated Purchaser SPA.
(2) Conditions to the Seller's obligation to sell
The Seller's obligation to sell under the Designated Purchaser SPA is also
conditional on the satisfaction or waiver (as applicable) of certain
conditions, including (i) the obtaining of the necessary government approvals
(including, if applicable, antitrust approvals) and the completion of the
necessary governmental registration by the Designated Purchaser, (ii) the
Designated Purchaser having obtained all necessary internal approvals
(including approval from its investment committee) and having provided its
duly executed partnership agreement to the Seller, (iii) the agreement among
the then shareholders of SHPL immediately after Closing on arrangements
concerning SHPL such as corporate governance, business development and
shareholders' rights during the Transition Period, (iv) the agreement among
the then shareholders of SHPL immediately after Closing on the distribution of
retained earnings as of October 31, 2024 of SHPL and the allocation of profits
or losses generated by SHPL prior to Closing, and (v) the limited partner of
the Designated Purchaser having provided capital injection in the amount of
not less than RMB982,627,982 to the Designated Purchaser and the Designated
Purchaser having demonstrated it has sufficient funds to settle the purchase
price and complete the transaction. The Designated Purchaser undertook to use
its best endeavors to satisfy such conditions as soon as possible after the
date of the Designated Purchaser SPA.
(3) Conditions to the Designated Purchaser's obligation to
purchase
The Designated Purchaser's obligation to purchase under the Designated
Purchaser SPA is also conditional on the satisfaction or waiver (as
applicable) of certain conditions, including (i) the Seller having obtained
all necessary internal approvals, (ii) the agreement among the then
shareholders of SHPL immediately after Closing on arrangements concerning SHPL
such as corporate governance, business development and shareholders' rights
during the Transition Period, (iii) the agreement among the then shareholders
of SHPL immediately after Closing on the distribution of retained earnings as
of October 31, 2024 of SHPL and the allocation of profits or losses generated
by SHPL prior to Closing, and (iv) there being no occurrence of events that
could have any material adverse impact on SHPL and its development prospects.
As of the date of this announcement, condition (i) has been satisfied.
Closing
Within two Business Days after the satisfaction or waiver (as applicable) of
the conditions (other than conditions which can only be satisfied at Closing
by nature), the Designated Purchaser will initiate, and complete on a best
effort basis, the declaration of withholding taxes to the relevant tax
authorities.
Closing will take place (i) on the third Business Day after the issuance of
certificate for withholding taxes by the relevant tax authorities; or (ii)
such other date as may be agreed by the Seller and the Designated Purchaser.
Termination
The Seller and the Designated Purchaser both have the right to terminate the
Designated Purchaser SPA if any of the conditions are not satisfied or waived
(as applicable) by the Longstop Date, provided that the failure to satisfy
such condition is not caused by or resulted from the failure of such party to
perform any obligation under the Designated Purchaser SPA and not within the
control of such party.
The Seller is entitled to unilaterally terminate the Designated Purchaser SPA
prior to Closing by written notice to the Designated Purchaser in the event
that the Designated Purchaser fails to pay the purchase price for the
Designated Purchaser Sale Shares or settle the payment of withholding taxes in
accordance with the Designated Purchaser SPA and fails to remedy such failure.
The Seller and the Designated Purchaser are also entitled to unilaterally
terminate the Designated Purchaser SPA if the other party materially breaches
its warranties or other covenants or obligations under the Designated
Purchaser SPA and fails to remedy such breach.
4. THE GP HEALTH AGREEMENT 2
On February 28, 2025, the Seller and GP Health Service Capital entered into
the GP Health Agreement 2 in connection with the sale and purchase of the
Designated Purchaser Sale Shares pursuant to the Designated Purchaser SPA.
The Seller and GP Health Service Capital agreed that:
(1) GP Health Service Capital will complete the capital
contribution of the Designated Purchaser, and will on a best efforts basis
complete the registration of the capital contribution by March 31, 2025;
(2) Prior to the Closing, if there is any breach of the
provisions of the Designated Purchaser SPA by the Designated Purchaser or
other circumstances (including a failure to complete the Designated
Purchaser's capital contribution according to (1) above) resulting in the
Designated Purchaser not being able to purchase all or part of the Designated
Purchaser Sale Shares in accordance with the Designated Purchaser SPA, GP
Health Service Capital will, or will procure a fund established by GP Health
Service Capital as manager and one of the general partners (such fund or GP
Health Service Capital, the "GP Transferee", which shall be, and its ultimate
beneficial owners shall be, third parties independent of the Company and its
connected persons) to, pay the shortfall in the purchase price of
RMB982,627,982 not satisfied by the Designated Purchaser and purchase all of
the Designated Purchaser Sale Shares by itself or together with the Designated
Purchaser before the Longstop Date.
In such case, (i) the relevant parties will enter into a share purchase
agreement on substantially the same terms as the Designated Purchaser SPA with
the GP Transferee, and the GP Transferee will assume the rights and
obligations of the Designated Purchaser under the Designated Purchaser SPA
corresponding to the proportionate equity interest in SHPL it will purchase,
(ii) GP Health Service Capital and the GP Transferee will not further transfer
to any other party their rights and obligations under the Designated Purchaser
SPA and the share purchase agreement to be entered into, and (iii) the
Designated Purchaser SPA will be amended or terminated accordingly.
The Company will comply with the applicable requirements of the Listing Rules
and the AIM Rules for Companies in relation to any new share purchase
agreement.
5. THE GP HEALTH SUPPLEMENTAL SPA
On February 28, 2025, the Seller and GP Health Service Capital entered into
the GP Health Supplemental SPA, pursuant to which the GP Health SPA was
terminated effective as of the date of the GP Health Supplemental SPA, save
for certain surviving administrative provisions as set out in the termination
clause under the GP Health SPA. The Seller and GP Health Service Capital also
agreed that:
(i) there is no breach of the GP Health SPA by either party
and there are no known disputes regarding the performance of obligations under
the GP Health SPA and the execution of the GP Health Supplemental SPA; and
(ii) upon the termination of the GP Health SPA, GP Health
Service Capital may not in any manner require the Seller to assume any
obligations or initiate any legal proceedings against the Seller based on the
GP Health SPA.
6. THE SHANGHAI PHARMA SUPPLEMENTAL SPA
In connection with the designation by GP Health Service Capital of the GP
Purchaser Fund and the Designated Purchaser to purchase 25.1247% and 9.8753%
equity interest in SHPL respectively, pursuant to the GP Health SPA on
February 28, 2025, the Seller and Shanghai Pharma entered into the Shanghai
Pharma Supplemental SPA in relation to consequential amendments to the
Shanghai Pharma SPA, including:
(i) The conditions to obligations of both the Seller and
Shanghai Pharma are amended as follows:
The obligations of both the Seller and Shanghai Pharma under the Shanghai
Pharma SPA are conditional upon (i) the simultaneous Closing of the GP
Purchaser Fund SPA and the Designated Purchaser SPA, (ii) the Company having
obtained all necessary internal approvals and shareholders' approval with
respect to the Shanghai Pharma SPA, and (iii) Shanghai Pharma having obtained
the necessary government approvals (including antitrust approvals) and
completed the necessary governmental registrations.
(ii) The composition of the board of directors of SHPL are
amended as follows:
The board of directors of SHPL consists of seven directors, of which (i)
Shanghai Pharma and Shanghai TCM collectively have the right to nominate four
directors, (ii) GP Purchaser Fund has the right to nominate two directors, and
(iii) the Seller has the right to nominate one director.
Save for the foregoing, the other terms of the Shanghai Pharma SPA remain
unchanged and the Shanghai Pharma SPA (as amended pursuant to the Shanghai
Pharma Supplemental SPA) will continue to have full force and effect.
7. INFORMATION ON THE PARTIES
(1) GP Purchaser Fund
The GP Purchaser Fund is a limited partnership investment fund established
under the laws of the PRC by GP Health Service Capital as manager and a
general partner.
(2) Designated Purchaser
The Designated Purchaser is a limited partnership established under the laws
of the PRC by GP Health Service Capital as a general partner.
8. REASONS FOR, AND BENEFITS OF, THE PROPOSED DISPOSAL
As disclosed in the Announcement, the Company intends to use the proceeds from
the Proposed Disposal to further develop its internal pipeline and drive its
core business strategy forward.
The Company will reinvest the proceeds from the Proposed Disposal into its
operations in China, where it has established a strong presence over the past
two decades. This divestment will facilitate the allocation of resources that
can be redirected towards the Company's innovative initiatives in China,
specifically aimed at enhancing its research and development capabilities as
well as expanding its manufacturing and commercialization infrastructure. This
strategic focus will better position the Company to capitalize on its future
growth opportunities.
Resources will be committed to advancing the Company's internal pipeline and
driving its core innovation business. This initiative includes the development
of its next-generation antibody-drug conjugate ("ADC") platform, which
leverages the Company's extensive expertise in oncological pathways and its
proven track record in small molecule targeted therapeutics. By integrating
antibodies with targeted therapies rather than traditional cytotoxins, these
antibody-targeted therapy conjugates ("ATTCs") provide dual mechanisms for
targeting specific cells. Utilizing existing capital and the additional
proceeds from the Proposed Disposal, the first of these ATTCs is projected to
enter clinical trials in the second half of 2025, with more planned for 2026
and beyond.
Plans are also in place to further expand the manufacturing facilities at the
Company's flagship plant in Shanghai to include antibody manufacturing
capacity, to meet the rising demand for clinical supply and potential
commercial-scale manufacturing of drug candidates and products generated from
both the new technology platforms and its approved medicines.
As disclosed in the announcement of the Company dated February 28, 2025, the
Circular containing, among other things, (i) further details on the terms of
the Proposed Disposal; and (ii) other information as required under the
Listing Rules together with a notice convening the EGM, will be dispatched to
the Shareholders on or before March 31, 2025.
The Proposed Disposal is subject to all of the conditions under the Further
Agreements and the Shanghai Pharma SPA (as amended by the Shanghai Pharma
Supplemental SPA) being satisfied (or, if applicable, waived) and therefore
may or may not become unconditional. If any of the conditions under the
Further Agreements and the Shanghai Pharma SPA (as amended by the Shanghai
Pharma Supplemental SPA) is not satisfied (or, if applicable, waived), the
Proposed Disposal will not proceed. Shareholders and potential investors are
reminded to exercise caution when dealing in the shares and other securities
of the Company.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following
expressions have the following meanings:
"Designated Purchaser" Shanghai GP Zhibaihe Enterprise Management Partnership (Limited Partnership)*
(上海金浦志佰合企業管理合夥企業(有限合夥)), a limited
partnership established under the laws of the PRC by GP Health Service Capital
as a general partner
"Designated Purchaser Sale Shares" shares representing 9.8753% equity interest in SHPL
"Designated Purchaser SPA" the share purchase agreement dated February 28, 2025 between the Seller and
the Designated Purchaser in relation to the sale and purchase of the
Designated Purchaser Sale Shares
"Further Agreements" the GP Purchaser Fund SPA and the Designated Purchaser SPA
"GP Capital" GP Industrial Investment Fund Management Co., Ltd.
(金浦產業投資基金管理有限公司), a company incorporated in the
PRC with limited liability
"GP Health Agreement 1" the agreement dated February 28, 2025 between the Seller and GP Health Service
Capital in connection with the sale and purchase of the GP Purchaser Fund Sale
Shares pursuant to the GP Purchaser Fund SPA
"GP Health Agreement 2" the agreement dated February 28, 2025 between the Seller and GP Health Service
Capital in connection with the sale and purchase of the Designated Purchaser
Sale Shares pursuant to the Designated Purchaser SPA
"GP Health Supplemental SPA" the supplemental agreement to the GP Health SPA dated February 28, 2025
between the Seller and GP Health Service Capital
"GP Purchaser Fund" GP Zhicheng Private Equity Investment Fund Partnership (Limited Partnership)*
(上海金浦志誠私募投資基金合夥企業(有限合夥)), a limited
partnership investment fund established under the laws of the PRC by GP Health
Service Capital as manager and a general partner
"GP Purchaser Fund Sale Shares" shares representing 25.1247% equity interest in SHPL
"GP Purchaser Fund SPA" the share purchase agreement dated February 28, 2025 between the Seller and GP
Purchaser Fund in relation to the sale and purchase of the GP Purchaser Fund
Sale Shares
"Proposed Disposal" the proposed disposal of the Sale Shares pursuant to the Further Agreements
and the Shanghai Pharma SPA (as amended by the Shanghai Pharma Supplemental
SPA)
"Sale Shares" shares representing 45% equity interest in SHPL
"Shanghai Pharma Supplemental SPA" the supplemental agreement to the Shanghai Pharma SPA dated February 28, 2025
between the Seller and Shanghai Pharma
"US$" or "US dollars" United States dollars, the lawful currency of the United States
* For identification purposes only
For the purpose of this announcement, the conversion of amounts in Renminbi
into US dollars has been made at the rate of US$1 to RMB7.36. The amounts in
US dollars so converted are stated for reference only and the statement of
those amounts should not be construed as a representation that amounts in
Renminbi have been, or could be, converted into US dollars at this or any
other rate.
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. Since inception it has
focused on bringing 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 approved in the US, Europe and Japan. 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/) .
By Order of the Board
Edith Shih
Non-executive Director and Company Secretary
Hong Kong, March 2, 2025
As at the date of this announcement, the Directors of the Company are:
Chairman and Non-executive Director: Non-executive Directors:
Dr Dan ELDAR Ms Edith SHIH
Ms Ling YANG
Executive Directors:
Dr Weiguo SU Independent Non-executive Directors:
(Chief Executive Officer and Mr Paul Rutherford CARTER
Chief Scientific Officer)
(Senior Independent Director)
Mr CHENG Chig Fung, Johnny
Dr Renu BHATIA
(Chief Financial Officer)
Dr Chaohong HU
Mr Graeme Allan JACK
Professor MOK Shu Kam, Tony
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