Hony raises $528m with another part exit from CSPC Pharma

Joyful Horizon, a subsidiary of the private equity firm, offloaded 650,000 shares at HK$6.30 apiece, according to a regulatory filing. The sale is said to have been priced at the bottom end of the indicative range and at an 8.3% discount to Wednesday's close. The stock gained 70% last year and, prior to the partial exit, was up 12% for 2014.

Hony previously raised HK$4.41 billion in May through the sale of 600 million shares in CSPC to third parties and 105.9 million shares to an investment vehicle owned by the company's chairman.

Joyful Horizon is one of five Hony-controlled entities that held a collective 62.26% stake in CSPC ahead of the most recent partial exit. This has now fallen to 51.25%. Joyful Horizon's individual interest has dropped from 41.78% to 30.77%.

Hony bought parent company China Shijiazhuang Pharmaceutical Group from the State-owned Assets Supervision and Administration Commission of Shijiazhuang municipal government for RMB870 million in 2007. It also indirectly owned a 59.03% stake in Hong Kong subsidiary China Pharmaceutical Group.
The investment came from Hony Capital Fund III, which closed at $580 million in 2006.

It is an example of a state-owned enterprise (SOE) restructuring, which are readily associated with Hony. Post-restructuring, the listed entity was renamed CSRC Pharmaceutical and Hony has now made three partial exits from the business in the last 13 months via sell downs or block trades.

In October last year, the private equity firm sold a 13.07% stake in CSPC for $260 million. There was also a $155 million exit six months earlier.

Located in Shijiazhuang, CSPC produces blockbuster drugs used for treating cardiovascular and cerebrovascular conditions, as well as antibiotics and vitamin products. The Hong Kong-listed entity reported revenues of HK$9.9 billion and profit of HK$973 million in 2013.

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• Topics
• Exits
• Healthcare
• Greater China
• healthcare
• Hony Capital
• China
• Exit
• Sell down