Benzinga | Mar 24, 2021 10:29AM EDT

Hutchison China Offloads Stake In China OTC Joint Venture For $169M

Hutchison China MediTech (NASDAQ: HCM) has agreed to sell its non-core and non-consolidated over-the-counter drug joint venture business to GL Capital Group.

* The sale of our shares in the joint venture, and exit from the OTC drug arena, will allow us to focus our organization and resources on our primary aim of accelerating investment in our Oncology/Immunology assets in China and beyond." said Simon To, Chairman of HCM.

* HCM will receive approximately $169 million in cash, representing about 22 times the joint venture's adjusted net profit attributable of $7.7 million in 2021.

* Of the proceeds, approximately $127 million is related to its shareholding in the joint venture, with a roughly $42 million balance related to distributions of the previously announced land compensation and prior year undistributed profits.

* A deposit of $15.9 million is payable by GL Capital immediately following the signing of the agreement.

* The transaction is expected to close in mid-2021.

* Price Action: HCM shares are trading 0.64% lower at 27.86 in market trading hours on the last check Wednesday.