Biohit Oyj Inside information, 31st May, 2017 at 2 pm local time (EEST)
On the 2nd of January 2017 Biohit Oyj made an announcement regarding the share capital reduction of its joint venture Biohit HealthCare (Hefei) Co. Ltd thereby assigning ownership in the company.
The transaction has received the necessary approval from the authority and the company’s share capital has been reduced by an amount equal to Biohit Oyj’s shareholding. Resulting from the transaction, a profit of approximately EUR 8.5 million will be booked in the first half of Biohit Oyj’s operating result impairing comparability (the profit will be updated with May’s profit share after the month has been closed). Out of this profit, approximately EUR 6.8 million will be booked to the balance sheet as intellectual property rights. Additionally a cash payment will be received as part of the transaction which corresponds to ca. EUR 1.7 million calculated with CNY rate at the date of this release. Due to the capital movement restrictions in force, the payment of the cash sum will require approval from the State Administration of Foreign Exchange, which is expected to be completed during the second half of 2017. Biohit HealthCare (Hefei) Co. Ltd is no longer Biohit Oyj’s joint venture and it is no longer consolidated to the group balance sheet starting from 1st of June 2017.
In conjunction with the reduction of the share capital, Biohit Oyj and Biohit HealthCare (Hefei) Co. Ltd signed a license and distribution agreement, which is now in force. The agreement gives Biohit HealthCare (Hefei) Co. Ltd rights to manufacture and sell GastroPanel® product in China, Macao and Hongkong as well as use Biohit Oyj’s trademarks. In consideration for the rights, Biohit Oyj receives a royalty that is calculated from GastroPanel® product net sales of Biohit HealthCare (Hefei) Co. Ltd throughout the duration of the agreement. Pursuant to the distribution agreement, Biohit Oyj also sells raw materials required for manufacturing GastroPanel® products exclusively to Biohit HealthCare (Hefei) Co. Ltd. The license and distribution agreement remains in force for at least 15 years.
CEO Semi Korpela, Biohit Oyj: ‘Following the transaction, our GastroPanel® -strategy in China moves to the commercial phase and we will continue the close cooperation together with our partner’.
General Manager Liu Feng, Biohit HealthCare (Hefei) Co. Ltd : ‘The transaction enables attracting investments required for growth as well as access to various forms of state subsidies and technology support. We can begin different cooperation projects on a national as well as municipal level together with the Ministry of Science & Technology of China and take part in centralised bidding contests. Moving to an entirely Chinese owned company also enables better access to national screening programs’.
Additional information:
CEO Semi Korpela, Biohit Oyj
tel. +358 9 773 861
investor.relations@biohit.fi
www.biohithealthcare.com
Biohit in brief
Biohit Oyj is a globally operating Finnish biotechnology company. Biohit mission is “Innovating for Health” – we produce innovative products and services to promote research and early diagnosis. Biohit is headquartered in Helsinki, Finland, and has subsidiaries in Italy and the UK. Biohit Series B share (BIOBV) is quoted on Nasdaq Helsinki in the Small cap/Healthcare group. www.biohithealthcare.com