Fosun Pharma Proposes To Privatizate Tongjitang

Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (600196) announced on the night of April 8th, its subsidiary Fosun Industrial Co., Limited. (shorted as Fosun Industrial hereafter) and Hanmax Investment Limited (shorted as Hanmax Investment hereafter) have jointly put forward a Proposal to the Directorate of Tongjitang Chinese Medicines Company (shorted as Tongjitang hereafter) regarding privatization of Tongjitang.
With reference to the Proposal, Fosun Industrial and Hanmax Investment will jointly establish a new company, of which Hanmax Investment will share 67.9% stocks of the new company while Fosun Industrial will share 32.1%. Hanmax Investment is planning to invest USD 21.236 million cash to buy 17.988 million of the common shares outstanding from the remaining shareholders except the merging sides; in addition, Fosun Industrial & Hanmax Investment will cancel the currently-held shares of Tongjitang through nil consideration.
After acquisition, Fosun Industrial and Hanmax Investment will hold shares of Tongjitang in the proportion same as the shares they hold in the new company, and complete the merging work between the new company and Tongjitang. Of which, Tongjitang is proposed to be a company that continues to exist, and the shares of Tongjitang owned by other shareholders except Fosun Industrial and Hanmax Investment, will be transferred to the right of accepting the consideration of cash and then be cancelled. After that, Tongjitang will be delisted from the NYSE. As a result, Fosun Industrial will still control 32.1% shares of Tongjitang provided above privatization is done successfully.
Fosun Pharma expressed that, as a shareholder of Tongjitang, they wanted to reduce the operation cost and enhance profitability of Tongjitang through the fulfillment of this privatization proposal, so as to benefit the future development of Tongjitang and realize the maximization of shareholder s profits.