SHENZHEN, China, Sept. 28 /PRNewswire-Asia-FirstCall/ --
Tongjitang Chinese Medicines Company (the "Company" or
"Tongjitang") (NYSE: TCM), a leading specialty pharmaceutical
company focusing on the development, manufacturing, marketing and
selling of modernized traditional Chinese medicine in China, today announced that the Company has
entered into a share transfer agreement with Guizhou Huixian
Investment Management Company Limited (the "Buyer") to sell 100% of
the equity interest in Guizhou Tongjitang Asset Management Company
Limited (the "Asset Management Co."), which holds Guizhou
Tongjitang Pharmaceutical Distribution Co., Ltd., Guizhou
Tongjitang Pharmacy Chain Stores Co., Ltd. and a 95% equity
interest in Gui Liquor Co., Ltd. ("Gui Liquor"), for a total cash
consideration of RMB259.3 million.
Additionally, the Buyer will release Guizhou Tongjitang
Pharmaceutical Co. Ltd. ("Tongjitang Pharmaceutical"), the
Company's wholly owned subsidiary, from its obligation to guarantee
RMB105.0 million of Gui Liquor's bank
loans.
Pursuant to the share transfer agreement, the purchase price
will be payable in four installments of 5%, 5%, 45% and 45%,
respectively. As of the date of this announcement, the Company has
received the first installment of RMB13.0
million from the Buyer. The Buyer will be entitled to
conduct due diligence within 60 days of the first payment, after
which all parties involved will work together to obtain the
approval and amend the registration in order to change the
shareholder of Asset Management Co. to the Buyer. The second
installment of the consideration will become payable within seven
days after the completion of the amendment to the registration.
Within 15 days after completing the amendment to the
registration, the Buyer will be obligated to release Guizhou
Tongjitang from its obligation to guarantee RMB105.0 million of Gui Liquor's bank loans. The
third and fourth installments of the consideration will be due
June 30, 2011 and December 31, 2011, respectively, subject to the
satisfaction of certain conditions.
Xiaochun Wang, Tongjitang's Chief
Executive Officer and Chairman of the Board of Directors, stated,
"We have undertaken this major strategic move in order to better
capitalize on China's ongoing
healthcare reform. After the transaction, Tongjitang will be better
equipped to focus on its core business of developing, manufacturing
and marketing modernised traditional Chinese medicines. We expect
our profit margins to further improve after the sale of the least
profitable component of our business."
About Tongjitang Chinese Medicines Company
Tongjitang Chinese Medicines Company, through its operating
subsidiaries Guizhou Tongjitang Pharmaceutical Co. Ltd., Guizhou
Long-Life Pharmaceutical Company Limited, Qinghai Pulante
Pharmaceutical Co., Ltd. and Anhui Jingfang Pharmaceutical Co.,
Ltd., is a vertically integrated specialty pharmaceutical company
focused on the development, manufacturing, marketing and selling of
modernized traditional Chinese medicine in China. Tongjitang's principal executive
offices are located in Shenzhen,
China.
Tongjitang's flagship product, Xianling Gubao, is the leading
traditional Chinese medicine for the treatment of osteoporosis in
China as measured by sales in
Renminbi. In addition to Xianling Gubao, the Company manufactures
and markets 35 other modernized traditional Chinese medicine
products and 36 western medicines. Please visit www.tongjitang.com
for more information.
Safe Harbour Statement
This announcement contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements other than statements
of historical fact in this announcement are forward-looking
statements. These forward-looking statements involve known and
unknown risks and uncertainties and are based on current
expectations, assumptions, estimates and projections about the
Company and the industry. Information regarding these risks,
uncertainties and other factors is included in the Company's most
recent annual report on Form 20-F and other filings with the SEC.
The Company undertakes no obligation to update forward- looking
statements to reflect subsequent occurring events or circumstances,
or to changes in its expectations, except as may be required by
law. Although the Company believes that the expectations expressed
in these forward looking statements are reasonable, they cannot
assure you that their expectations will turn out to be correct, and
investors are cautioned that actual results may differ materially
from the anticipated results.
CONTACT:
ICR, Inc.
Ashley M. Ammon or Christine Duan
Tel: +1-203-682-8200 (Investor Relations)
SOURCE Tongjitang Chinese Medicines Company
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