Apex’s indirect stake in China’s Luyan to fall to 15.7%

Apex Healthcare Bhd’s (AHB) associate company Xiamen Maidiken Science & Technology Co Ltd (MDK) has entered into agreements to raise 136.9 million yuan (RM64.7 million) of working capital in the latter’s subsidiary via a share placement exercise.

In an announcement to Bursa Malaysia yesterday, AHB said China-based MDK’s subsidiary Luyan (Fujian) Pharma Co Ltd would issue 21.6 million new shares to CCBI Healthcare Fund, a fund managed by China Construction Bank’s investment banking arm, and private equity fund Hong Qiao Investment Fund.

AHB said the exercise would effectively dilute its indirect effective interest in Luyan to 15.7% from 20.5%. However, AHB said the dilution was not expected to have a material impact on the group’s earnings for the financial year ending Dec 31, 2010.

Currently, AHB owns a 66.1% stake in First SGC Pte Ltd, which in turn owns 49% of MDK. MDK owns a 63.4% stake in Luyan, a leading pharmaceutical distributor and retailer in Fujian, China.

AHB said the share placement exercise would enable Luyan to capitalise on new opportunities to enlarge its market share and sustain high-growth rate, in view of the rapid expansion of China’s healthcare sector.



This article appeared in The Edge Financial Daily, July 7, 2010.