2 Mar 2010 12:28

Shanghai Pharma to sell non-core business assets

Shanghai. March 2. INTERFAX-CHINA - Shanghai Pharmaceutical (Group) Co. Ltd., one of China's largest pharmaceutical distributors, announced on Mar. 2 it will dispose of its non-core business assets.

The company said it will sell its 40 percent stake in Shanghai General Pharmaceutical Co. Ltd. and approximately 16 million shares of Shenyin Wanguo Securities Co. Ltd. Shanghai Pharma will also sell a 40 percent stake held by its subsidiary Shanghai Huashi Asset Management Co. Ltd. in Shanghai International Pharmaceutical Trading Co. Ltd.

Shanghai South Investment Group Co. Ltd. will buy all of the shareholdings for a total of RMB 134.07 million ($19.63 million).

"General Pharma's business scale is small and International Pharma's business performance has not been good," an employee from Shanghai Pharma, who declined to be named, told Interfax.

In addition, Shanghai Pharma and Huashi Assets will sell Shanghai International Pharmaceutical Trading Exhibition Building, located in Pudong New Area, to Shanghai Futianjian Grain & Oil Trading Co. Ltd. for RMB 319.36 million ($49.76 million).

"The building used to function as Shanghai Pharma's headquarters," the employee said. Shanghai Pharma's headquarters is currently located in Luwan district in downtown Shanghai.

According to the announcement, Shanghai Pharma will use the cash raised from the sale of the non-main business assets to repay bank loans and to acquire domestic pharmaceutical distributors and their assets.

In the announcement, Shanghai Pharma also noted it plans to set up a pharmaceutical distribution joint venture in Shandong Province to sharpen its competitive edge in eastern China.

- KZ