Golden Meditech Holdings announces that its wholly-owned subsidiary, GM Investment Company Limited has entered into a conditional settlement agreement with Sanpower Group regarding an outstanding amount of approximately US$250m owed to Fortress Group by Sanpower.
Pursuant to the settlement agreement, Sanpower has agreed to pay an amount of US$300 million to GM Investment as the final settlement to resolve the claim in relation to Fortress.
The management is committed to maximising returns for its shareholders. It is expected that the conclusions of this settlement arrangement and the previously signed PAGAC settlement agreement will bring approximately US$120 million to the Group, which exceeds an impairment provision of approximately HK$760 million (equivalent to approximately US$98.06 million) that was made against the Fortress interest held by the Group in the year ended 31 March 2015.
The settlement agreement will become effective on the effective date ("Effective Date") upon, inter alia, the approval by the shareholders of the Company.
GM Investment will receive the settlement amount in five installments, with the first installment of US$80 million payable within 2 business days from the Effective Date, and the remaining four installments of US$55 million each payable within 9 months, 18 months, 27 months and 36 months from the signing date of the settlement agreement, respectively.
The first three installments shall be paid in cash by US Dollars (or its equivalent in Renminbi). The remaining two installments shall be paid, at GM Investment's sole discretion, in cash by US Dollars (or its equivalent in Renminbi) or in kind by Sanpower's investment in securities listed on the Shanghai Stock Exchange.
After full payment of the settlement sum, GM Investment will release and discharge Sanpower from all claims in relation to (i) the outstanding amount owed to Fortress and (ii) the sale and purchase of ordinary shares of Fortress under the agreement entered into between GM Investment and Sanpower in March 2014.
Golden Meditech is a leading integrated-healthcare enterprise in China. It is a first-mover in China, having established its dominant positions in several markets including the medical devices market, the cord blood storage market and the hospital management market in the healthcare industry, thanks to its strengths in innovation and market expertise and the ability to capture emerging market opportunities.
Going forward, Golden Meditech will continue to pursue a leading position in China's healthcare industry both through organic growth and strategic expansion.