WuXi Plans $80 M Private Placement for Small-Molecule Subsidiary
WuXi PharmaTech (WuXi), a research and development and technology company, plans to fund capacity expansion for its subsidiary, SynTheAll Pharmaceutical Co. Ltd. (STA), a small-molecule manufacturer, by entering into a private placement agreement to sell 7,160,000 of STA's common shares, approximately 6% of the company's stock, that has a current estimated value of approximately RMB 498, 694,000 ($80 million). After giving effect to the private placement, WuXi will remain STA's primary shareholder, owning 89.1% of its outstanding shares.
STA is in the process of building new facilities in Changzhou, China to increase production capacity, and the proceeds of this private placement will fund the capacity increases and future investment in STA. STA provides process chemistry services and manufactures small-molecule advanced intermediates and active pharmaceutical ingredients for use in preclinical and clinical trials and for marketed small-molecule drugs. Its operations are located in the Waigaoqiao Free Trade Zone and Jinshan, both in Shanghai, and in Changzhou. STA does not include WuXi’s biologics manufacturing business.
The closing of the private placement is subject to customary conditions and is expected to close by the end of July 2015. In April 2015, STA completed the listing of its shares on the New Third Board, the over-the-counter stock exchange in China.
Source: WuXi PharmaTech