Notice of EGM
19 11월 2009 - 4:01PM
UK Regulatory
TIDMCMSH
RNS Number : 7416C
China Medical Systems Holdings Ltd
19 November 2009
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| For immediate release | 19 November 2009 |
+------------------------------------------+------------------------------------------+
China Medical System Holdings Limited
Notice of Extraordinary General Meeting
China Medical System Holdings Limited (AIM: CMSH) announces that an EGM of the
Company is being convened at 10:00am (Hong Kong time) on 11th December 2009 at
Room Milan 2002, The Venetian Macao-Resort-Hotel Estrada da Baía de N. Senhora
da Esperança, s/n, Taipa, Macau.
Introduction
It is proposed that CMS' entire holding in Healthlink (a subsidiary of the
Company) be distributed to the Eligible Holders on a pro rata basis, with an
option granted to those Eligible Holders to elect for the Cash Alternative of
US$0.232 for each Ordinary Share.
The CMS Board believes that the proposed Equity Investment, Dividend in Specie
and Cash Alternative (if any) shall have no impact on CMS' financial position
and thus CMS would be able to pay its debts as and when they fall due
immediately after such Equity Investment, Dividend in Specie and the payment of
any sums in relation to the Cash Alternative have taken place. All the remaining
Healthlink Shares held by CMS after the Distribution shall, subject to the
Shareholders' approval at the EGM, then be repurchased and cancelled by
Healthlink.
After completion of the Proposals, Healthlink shall no longer be a subsidiary of
CMS and Healthlink Shares would then be owned directly by those Shareholders who
did not receive the Cash Alternative. As no cash would be received by the
Company in return for the Distribution, it would be expected that the market
value of the Ordinary Shares on AIM will fall to reflect the reduction in the
Company's assets resulting from the proposed de-merger.
Equity Investment
Prior to the date of this announcement, the CMS Board proposed that a sum of
US$10 million be injected into Healthlink in exchange for 46,408,804 newly
allotted Healthlink Shares. The purpose of making the Equity Investment is to
provide sufficient working capital for Healthlink in its R&D operation for a
period of time following the de-merger. Subject to approval of the Equity
Investment by the Shareholders, Healthlink shall issue and allot 46,408,804
Healthlink Shares to CMS at a premium of US$0.205 per Healthlink Share with the
effect that immediately preceding the Distribution, the number of issued
Healthlink Shares shall mirror that of CMS, being 47,408,904 shares, so that the
Dividend in Specie can be distributed on a one-for-one basis without the need to
deal with any issues relating to fractional entitlements.
Background Information
In the past few years, CMS has been supportive of the R&D business of
Healthlink, a wholly owned subsidiary of the Company incorporated in BVI.
Healthlink's R&D business has been led by Lam Kong, the Chairman of the Company,
for more than ten years. It commenced the R&D on innovative medical product in
or around 1998 and then focused on the R&D in relation to novel biologically
active peptides and microbiology preparations. In the past few years, CMS has
been supportive of the R&D business of Healthlink. Healthlink has been
concentrating mainly on the PRC domestic R&D projects through its PRC
subsidiaries and overseas R&D projects by way of out-licensing or by
international financing arrangements through its offshore subsidiaries
established in BVI. Healthlink has a strong Intellectual Property portfolio. It
has been granted 50 international and 39 domestic patents, there are also 82
international and 7 domestic patents under application. In addition, Healthlink
has a peptide library containing 30 peptides extracted from pig spleen, with
biological activities, which indicate therapeutic potentials.
Healthlink's research pipeline includes:
* CMS024, for the treatment of primary liver cancer, has completed Phase IIb
Clinical trial in the PRC, and the State Food and Drug Administration in the PRC
has approved to conduct an enlarged clinical study;
* CMS024-02, for the treatment of non-small cell lung cancer, is under preparation
for Phase II clinical trial in the PRC;
* CMS017, for the treatment of hepatitis B, is in pre-clinical stage; and
* CMS010-26, with anti-immunosuppressive effects, is also in pre-clinical stage.
Based on the existing transactions made between a subsidiary of CMS and a
subsidiary of Healthlink, Healthlink has transferred all the rights, including
the patent rights of CMS024 in PRC to the subsidiary of CMS and agreed to
continue to carry out the R&D on CMS024 in PRC at its own costs and resources
until CMS024 receives the marketing approval from the State Food and Drug
Administration in the PRC.
In order to meet the global market needs in a growing economy, the CMS Board, by
balancing the returns in CMS' two principal business streams, believes that it
would be in the best interests of all the Shareholders if CMS had focused on its
manufacturing, sales & marketing and distribution businesses. For the purpose of
achieving the de-merger, the CMS Board has therefore decided to transfer its
interest in Healthlink to Eligible Shareholders by way of a Dividend in Specie.
One of the main reasons for making the decision to dispose of CMS' interest in
Healthlink by means of the Dividend in Specie rather than a straightforward sale
is that the CMS Board wishes to offer Eligible Shareholders the opportunity of
continuing to hold interests in Healthlink after the Proposals become effective,
notwithstanding the de-merger of Healthlink from the Group as proposed by the
CMS Board. Shareholders who take up Healthlink Shares pursuant to the Dividend
in Specie will be able to participate in all general meetings of Healthlink
although the decision-making regarding the business and operation of Healthlink
will be determined by Healthlink Board and, enjoy all the returns that may arise
from the results of any existing or future R&D projects undertaken by
Healthlink.
Related Party Transaction
As at the date hereof, each of Lam Kong, Chen Hongbing, Hou Xiaoxuan and Chen
Yanling, directors of the Company, having interests in the Ordinary Shares
through their respective 100% owned entities has provided an irrevocable
undertaking to CMS stating that the relevant entity will elect to receive
Healthlink Shares for its entitlement under the Distribution in respect of all
of its holding in CMS. The interests of those CMS Directors taken together
account for approximately 80.365% of the issued share capital of CMS
representing a total of 38,100,000 Ordinary Shares.
The proposed de-merger of Healthlink along with the election by the CMS
Directors (Lam Kong, Chen Hongbing, Hou Xiaoxuan, and Chen Yanling) to receive
Healthlink Shares is deemed to be a related party transaction under AIM Rules.
The Company's nominated adviser, Seymour Pierce Limited, considers that the
terms of the de-merger of Healthlink are fair and reasonable insofar as the
Company's shareholders are concerned.
At the EGM the Company will propose ordinary resolutions to consider and
approve:
1. the proposed capital injection of US$10 million to be made by the Company in
Healthlink in exchange for 46,408,804 newly allotted Healthlink Shares
2. the proposed dividend to be paid out of the share premium account of the
Company, such payment to be satisfied either by way of the Dividend in Specie or
the Cash Alternative of US$0.232 per ordinary share.
3. pursuant to the proposed repurchase by Healthlink of all remaining Healthlink
shares held by the Company after the Dividend in Specie so as to effect in full
the proposed de-merger for a consideration in a sum equal to an aggregate amount
of Cash Alternative payable by the Company to those Shareholders who elected or
are deemed to have elected to receive the Cash Alternative, subject to the
satisfaction of the statutory Solvency Test by Healthlink.
A circular containing the notice of EGM has today been posted to Shareholders,
and is available on the Company's website: www.chinamedicalsystem.com
Terms used in this announcement shall have the same meaning given to them in
the Circular.
For further information, please contact:
+-----------------------------------------------+---------------------------------+
| China Medical System | + |
| Holdings Limited | (852) |
| | 2369 |
| | 3889 |
+-----------------------------------------------+---------------------------------+
| Vincent Hui | |
| | |
+-----------------------------------------------+---------------------------------+
| Seymour Pierce Limited | + |
| | 44 |
| | (0)20 |
| | 7107 8344 |
+-----------------------------------------------+---------------------------------+
| Chris Howard / | |
| Huaizheng Peng | |
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Notes for editors
China Medical System Holdings Limited
China Medical System Holdings Limited (CMS) is listed on AIM of the London Stock
Exchange with the ticker symbol "CMSH". It is an integrated and profitable
pharmaceutical company, which develops, manufactures and distributes
prescription drugs in PRC. It focuses on distributing high margin imported
pharmaceutical products as well as developing in house drugs. For further
information, please visit www.chinamedicalsystem.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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