BRIEF: Venus Medtech sells Hangzhou project for 375 million yuan
Medical device maker Venus Medtech (Hangzhou) Inc. (2500.HK) announced on Tuesday that it will sell its Qiming Healthcare Life Science Industrial Park in Hangzhou, along with related land-use rights, to Hangzhou Binjiang Urban Construction Development Co. Ltd. for 375 million yuan ($53 million). The transaction remains subject to shareholder approval.
The company said the sale of the park, which is still under construction, aligns with its strategy to focus on core heart valve technologies and reduce investment in non-core and capital-intensive projects. Net proceeds from the sale, estimated at 344 million yuan, will be used mainly to repay 265 million yuan in bank loans, with the remaining 78.6 million yuan allocated for general working capital.
Venus Medtech expects to record a pre-tax loss of around 5 million yuan from the transaction but said it will relieve it of about 700 million yuan in future construction costs and improve its cash flow and the balance sheet. The board believes the sale, though about 12% below valuation, is reasonable and will enhance the company’s financial flexibility while allowing it to concentrate on its main business.
Venus Medtech’s stock opened higher on Wednesday and closed at HK$2.52, up 2.44%.
By Lee Shih Ta
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