GOLDEN MEDITECH HOLDINGS LIMITED

Transcription

1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. GOLDEN MEDITECH HOLDINGS LIMITED (Incorporated in the Cayman Islands with limited liability) (Stock Code: 00801) MAJOR TRANSACTION AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE CONVERTIBLE NOTES OF CCBC FROM A CONNECTED PERSON Financial Adviser to the Company THE AGREEMENT The Board is pleased to announce that, on 3 November 2015 (after trading hours), the Company entered into the Agreement with the Vendor, pursuant to which the Company has conditionally agreed to acquire and the Vendor has conditionally agreed to sell the Sale CN with an aggregate outstanding principal amount of US$65,000,000 issued by CCBC, a non wholly-owned subsidiary of the Company, at the Consideration and, if applicable, the Additional Payment additionally. Both the Consideration and the Additional Payment (if any) shall be payable in cash. LISTING RULES IMPLICATIONS As one or more of the applicable percentage ratios under Rule of the Listing Rules in respect of the CN Acquisition, when aggregated with the Magnum CN Acquisition and the CGL Acquisition, exceeds 25% but all of them are below 100%, the CN Acquisition constitutes a major transaction of the Company under 1

2 Chapter 14 of the Listing Rules, and is therefore subject to the reporting, announcement and shareholders approval requirements. In addition, the CN Acquisition also constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules and is subject to the reporting, announcement and independent shareholders approval requirements. The Vendor and its associate(s) will be required to abstain from voting on the shareholders resolutions in relation to the Agreement and the transactions contemplated thereunder. GENERAL The Independent Board Committee (comprising the independent non-executive Directors only) has been formed to advise the Independent Shareholders on the Agreement and the transactions contemplated thereunder. As at the date of this announcement, the Independent Financial Adviser has not been appointed yet. The Company will issue an announcement after the Independent Financial Adviser has been appointed. The EGM will be convened and held for the Independent Shareholders to consider, and if thought fit, to approve, the Agreement and the transactions contemplated thereunder. A circular containing, among other things, (i) further information on the Agreement and the transactions contemplated thereunder; (ii) financial information of the Group and the CCBC Group; (iii) pro forma financial information on the enlarged group; (iv) the recommendation of the Independent Board Committee in relation to the CN Acquisition; (v) a letter from the Independent Financial Adviser containing its advice on the CN Acquisition to the Independent Board Committee and the Independent Shareholders; and (vi) notice of the EGM, will be despatched to the Shareholders on or before 18 December 2015 as additional time is required for the preparation of the relevant information for inclusion in the circular. Completion is subject to the fulfillment of the conditions precedent set out in the Agreement and therefore may or may not occur. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares. INTRODUCTION Reference is made to the announcement of the Company dated 26 August

3 It was disclosed in the said announcement that Magnum 2, a company wholly owned by Mr. Kam, entered into the KKR SPV Share Agreement with Brilliant China Healthcare Investment Limited (the KKR Vendor ) pursuant to which Magnum 2 agreed to acquire and the KKR Vendor agreed to sell the entire issued share capital of the Vendor which in turn owned the Sale CN immediately prior to the entering into the KKR SPV Shares Agreement. Completion of the KKR SPV Shares Acquisition had taken place on the KKR SPV Shares Completion Date, as a result, the Sale CN was ultimately owned by Mr. Kam through Magnum 2 and the Vendor on the same day. Mr. Kam executed a letter of undertaking dated 26 August 2015 in favor of the Company, pursuant to which Mr. Kam undertakes to procure the Vendor to grant a call option to the Company to acquire any part or all of the Sale CN and/or (where applicable) any or all of the CCBC Conversion Shares issued upon conversion of the Sale CN. After taking into account, among other things, that the acquisition of the Sale CN from the Vendor will constitute a connected transaction for the Company under the Listing Rules, the Company considered that it would be more appropriate to enter into an agreement to acquire the Sale CN subject to, among other things, compliance by the Company with all applicable requirements, including without limitation the requirements under the Listing Rules THE AGREEMENT The Board is pleased to announce that, on 3 November 2015 (after trading hours), the Company entered into the Agreement with the Vendor, pursuant to which the Company has conditionally agreed to acquire and the Vendor has conditionally agreed to sell the Sale CN with an aggregate outstanding principal amount of US$65,000,000 issued by CCBC. The principal terms of the Agreement are summarised as follows:- Date 3 November 2015 (after trading hours) 3

4 Parties (i) Purchaser: the Company; and (ii) Vendor: Excellent China Healthcare Investment Limited As at the date of this announcement, Mr. Kam is (i) an executive Director and chairman of the Company; and (ii) a director and chairman of CCBC and is therefore a connected person of the Company. As the Vendor is indirectly wholly-owned by Mr. Kam, the Vendor is an associate of Mr. Kam and is, therefore, a connected person of the Company. Assets to be acquired The Sale CN with an aggregate outstanding principal amount of US$65,000,000 (equivalent to approximately HK$503,750,000) which was issued by CCBC. Consideration The Consideration of US$161,784, (equivalent to approximately HK$1,253,827,959), payable in cash, represents the aggregate of: (i) US$13,300,000 (equivalent to approximately HK$103,075,000); (ii) the product of the Base Acquisition Price and the total number of the CCBC Conversion Shares upon full exercise of the Sale CN as of the KKR SPV Shares Completion Date, which equals to approximately US$146,582,100 (equivalent to approximately HK$1,136,011,275); (iii) (x) the total amount of interest accrued but unpaid on 50% of the principal amount of the Sale CN during the period from 27 April 2015 to the KKR SPV Shares Completion Date; and (y) the total amount of interest accrued but unpaid on 50% of the principal amount of the CN for the period from 27 April 2015 to 28 October 2015, being the second payment date for the consideration for the KKR SPV Acquisition, which is equivalent to an aggregate of (x) and (y) of approximately US$1,902, (equivalent to approximately HK$14,741,684); and The Consideration will be financed by the internal resources of the Group, or raising future debt capital. 4

5 Additional Payment Pursuant to the Agreement, the Company and the Vendor agreed that if the Final Acquisition Price is higher than the Base Acquisition Price, the Company shall, promptly upon completion of the CCBC Shares Acquisition, pay to the Vendor (or to his order) an amount (the Additional Payment ), in cash, to be calculated as follows:- Additional Payment = (Final Acquisition Price Base Acquisition Price) x total number of the CCBC Conversion Shares upon full conversion of the Sale CN as of the KKR SPV Shares Completion Date Conditions precedent Completion is conditional upon the satisfaction of the following conditions precedent: (i) compliance by the Company with all applicable requirements under all the applicable laws, rules and regulation, including but not limited to the Listing Rules in relation to the transactions contemplated under the Agreement including but not limited to obtaining the approval from the Independent Shareholders; and (ii) all other consents and approvals required by the Company for the transactions contemplated under the Agreement being obtained and where any consent or approval is subject to conditions, such conditions being acceptable to the Company. None of the above conditions can be waived. If any of the above conditions is not fulfilled by the Long Stop Date, (i) no party to the Agreement shall be obliged to proceed to Completion; and (ii) no party to the Agreement shall have any claim against any of the other party, except claim against out of any antecedent breach of the Agreement. As at the date of this announcement, none of the above conditions have been fulfilled. Completion Subject to the fulfillment of the conditions precedent set out in the section headed Conditions precedent above, Completion shall take place on the Completion Date. 5

6 BASIS FOR DETERMINING THE TOTAL CONSIDERATION The Total Consideration was determined based on arm s length negotiations between the Company and the Vendor, with reference to, among others, (i) the terms and conditions of the KKR SPV Shares Acquisition; (ii) the historical share price of CCBC on the NYSE; (iii) the terms and conditions of the Sale CN; and (iv) the Base Acquisition Price of US$6.40 per CCBC Share for the CCBC Shares Acquisition. The Base Acquisition Price of US$6.40 was determined with reference to the historical share price of CCBC, representing (i) a premium of 7.18% to the volume-weighted average closing share price during the last 30 trading days of the NYSE ended on 24 April 2015; (ii) a premium of 10.63% to the volume-weighted average closing share price during the last 60 trading days of the NYSE ended on 24 April 2015; and (iii) a premium of 12.80% to the volume-weighted average closing share price during the last 90 trading days of the NYSE ended on 24 April Having considered, among other things, (x) that CCBC is the largest cord blood bank operator in the PRC as disclosed in the section Information on the Group and (y) the stable and predictable business and operational model of CCBC as disclosed in the section Reasons for and benefits of the CN Acquisition in this announcement, the Directors consider that the said premiums are fair and reasonable. Accordingly, the Board is of the view that the Total Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole. However, the Total Consideration may change if the Final Acquisition Price is higher than the Base Acquisition Price. The Final Acquisition Price is subject to the definitive agreement between the Company and CCBC which has not yet been entered into as at the date of this announcement, and the proposed CCBC Shares Acquisition is still subject to the review and evaluation of the special committee of CCBC (the CCBC Special Committee ). There is no restriction limiting any upward and downward adjustments on the offer price for the CCBC Shares Acquisition (which was set at US$6.40 pursuant to the Proposal Letter), which will only affect the Final Acquisition Price, and there is no guarantee that the CCBC Special Committee will recommend the CCBC Shares Acquisition. In case the Final Acquisition Price is lower than the Base Acquisition Price of US$6.40, it will not have any effect on the terms and conditions of the Agreement and the transactions contemplated thereunder, including the consideration to be paid under the Agreement. If CCBC enters into definitive agreement with the Company regarding the proposed CCBC Shares Acquisition and the Final Acquisition Price is higher than the Base Acquisition Price, the Company will comply with all relevant Listing Rules requirements and seek all applicable approvals (including but not limited to the Shareholders approval (if applicable)) in the event that the Agreement would become a very substantial acquisition of the Company. 6

7 As at the date of this announcement, it was expected that the CCBC Shares Acquisition would constitute a very substantial acquisition of Company when aggregating with Magnum CN Acquisition, the CGL Acquisition and the CN Acquisition as required under Rule of the Listing Rules and thus is subject to the shareholders approval at a general meeting of the Company. The Company intends to re-comply with all the relevant requirements under Chapter 14 and Chapter 14A of the Listing Rules, including shareholders approval of the Magnum Agreement, the CGL Agreement, the Agreement together with the CCBC Shares Acquisition in accordance with the requirements under Chapter 14 and Chapter 14A of Listing Rules as a whole in a single resolution at the same general meeting of the Company if the Magnum CN Acquisition, the CGL Acquisition and the CN Acquisition constitute a very substantial acquisition of the Company resulting from the Final Acquisition Price being higher than the Base Acquisition Price. PRINCIPAL TERMS OF THE SALE CN The principal terms of the Sale CN are summarised as follows: Issuer : CCBC Principal amount : US$65,000,000 (equivalent to approximately HK$503,750,000 Interest rate and Internal Rate of Return : 7% per annum on any outstanding principal amount of the Sale CN, payable annually on each anniversary of the date of issuance of the Sale CN (the Interest ), subject to increase to 22.5% per annum from and after the occurrence of an Event of Default as described under the section Redemption below. On the Maturity Date (as defined below), a holder surrendering the Sale CN to CCBC shall receive an amount in cash which would yield a total internal rate of return (calculated based on a 365-day period and inclusive of Interest) of 12% per annum to such holder on the unconverted principal amount of the Sale CN up to the Maturity Date. 7

8 In addition, if CCBC pays any Excess Cash Dividend (as defined below) in any financial year, it shall simultaneously pay to the holder of a Sale CN an amount equal to the Excess Dividend Amount (as defined below) multiplied by the number of CCBC Conversion Shares into which such Sale CN is convertible at the Conversion Price then in effect on the relevant record date for the payment of such Excess Cash Dividend. Excess Cash Dividend means any cash dividend to holders of CCBC Shares that, together with all other cash dividends previously paid to holders of such CCBC Shares in the same financial year, exceeds, on a per CCBC Share basis, an amount equal to the Per Share Interest Amount. Per Share Interest Amount means an amount equal to (A) the Interest that has accrued and shall accrue on the Sale CN in such financial year divided by (B) the number of CCBC Shares into which the Sale CN is convertible at the Conversion Price then in effect on the relevant record date. Excess Dividend Amount, in respect of any Excess Cash Dividend, means the US$ amount equal to the total amount of all cash dividends paid per CCBC Share in the relevant financial year minus (A) the Per Share Interest Amount and (B) any Excess Dividend Amount in respect of which a payment has been made to such holder previously in such financial year. Issue date : 27 April 2012 (the Issue Date ) Maturity date : The maturity date of the Sale CN shall be fifth anniversary of the Issue Date (the Maturity Date ) Status : Unsecured Conversion Price : US$2.838 (equivalent to approximately HK$21.995), subject to adjustment 8

9 Ranking : All payments due under the Sale CN shall rank pari passu with all other senior convertible notes of CCBC and all other senior indebtedness of CCBC. Conversion Period : The period commencing from the Issue Date until the Maturity Date. Conversion Rights : At any time during the conversion period, the holder of the Sale CN shall be entitled to convert all or any portion of the outstanding principal amount of the Sale CN (in an amount of integral multiple of US$1,000,000) into CCBC Conversion Shares. Adjustment to Conversion Price : Adjustment of the Conversion Price in the following circumstances: (1) Where there are stock splits and stock combinations of the outstanding CCBC Shares, the Conversion Price will be proportionally adjusted by the same factor or multiple used in the stock splits and stock combinations, as the case may be. (2) (a) Where CCBC issues a dividend or distribution in CCBC Shares, the Conversion Price shall be decreased by multiplying the conversion price by the fraction below as of the time of such issuance. (b) Where CCBC sets a record date for the determination of holders of CCBC Shares entitled to receive such dividend or distribution, the Conversion Price shall be decreased by multiplying by the fraction below as of the close of business on such record date. Fraction = Total number of CCBC Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date (as the case may be) / (Total number of CCBC Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date (as the case may be) + the number of CCBC Shares issuable in payment of such dividend or distribution) 9

10 (3) Any of the following events (the Reorganisation Adjustment Events ): (a) consolidation or merger of CCBC or any of its subsidiaries with or into another Person; (b) sale, lease, licence, assignment, transfer, conveyance or disposal of all or substantially all of the properties or assets of CCBC or any of its subsidiaries to another Person; (c) consummation of a stock purchase, tender offer, exchange offer or other business combination (including, without limitation, a reorganisation, recapitalisation, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of CCBC s outstanding voting stock, the holders of which having the general voting power to elect, or the general power to appoint, at least a majority of its board of directors etc; (d) reorganisation, recapitalisation or reclassification of the CCBC Shares; and (e) any person or group becoming a direct/ indirect beneficial owner of over 50% of CCBC s outstanding voting stock, which involves CCBC in which the CCBC Shares are converted into or exchanged for securities, cash or other property (other than a transaction covered in paragraphs (1) and (2) above), then following such Reorganisation Adjustment Event, a Sale CN shall thereafter be convertible into, in lieu of CCBC Shares, such other kind and amount of securities, cash or property which a holder of the number of CCBC Conversion Shares issuable upon conversion of the Sale CN immediately prior to such Reorganisation Adjustment Event would have been entitled to receive pursuant to such 10

11 transaction. Appropriate adjustments in the Conversion Price shall thereafter be applicable in relation to any securities or other property thereafter deliverable upon the conversion of the Sale CN; and (4) any other events (including but not limited to grant of stock appreciation rights, phantom stock rights or other rights with equity features) which has the direct or indirect effect of adversely affecting the Sale CN holder s proportionate interest in the equity of CCBC. Redemption : The holder of the Sale CN may require CCBC to redeem all or any portion of the Sale CN at any time after the earlier of such holder s receipt of a notice of the occurrence of an Event of Default (defined below) and such holder becoming aware of an Event of Default. The principal amount shall be redeemed by CCBC at a price which, inclusive of the Interest, would yield a total internal rate of return (calculated based on a 365-day period) to 22.5% per annum to the holder on such principal amount to the date of payment. An Event of Default shall mean: (1) the suspension from trading or failure of the CCBC Shares to be listed on NYSE or on any other eligible market for a period of 10 consecutive Trading Days or for more than an aggregate of 30 Trading Days in any 365-day period, except where such suspension or failure of the CCBC Shares to be listed is due to a technological problem with the NYSE or the relevant eligible market, as the case may be; 11

12 (2) CCBC s (A) failure to cure a failure to convert the Sale CN by delivery of the required number of CCBC Conversion Shares within 5 Trading Days after the applicable share delivery date as stipulated under the terms of the Sale CN or (B) notice, written or oral, to the holder of the Sale CN at any time of its intention not to comply with a request for conversion of the Sale CN into CCBC Conversion Shares that is tendered in accordance with its terms; (3) CCBC s failure to pay to the holder of the Sale CN any amount of principal or Interest when and as due under the Sale CN for a period of at least 15 days; (4) the continuance of any default which has not been cured or waived for a period of 30 days under, or acceleration following default prior to maturity of, any indebtedness in excess of US$7,000,000 of CCBC or any of its subsidiaries (other than with respect to the Sale CN); (5) CCBC or any of its subsidiaries, pursuant to or within the meaning of Title 11, United States Code, or any similar federal, foreign or state law for the relief of debtors (collectively, Bankruptcy Law ), (a) commences a voluntary case, (b) consents to the entry of an order for relief against it in an involuntary case, (c) consents to the appointment of a receiver, trustee, assignee, liquidator or similar official (a Custodian ), or such Custodian shall otherwise be appointed, (d) makes a general assignment for the benefit of its creditors or (e) admits in writing that it is generally unable to pay its debts as they become due; (6) a court enters an order or decree under any Bankruptcy Law that (a) is for relief against CCBC or any of its subsidiaries in an involuntary case, (b) appoints a Custodian of CCBC or any of its subsidiaries or (c) orders the liquidation of CCBC or any of its subsidiaries; 12

13 (7) proceedings under any Bankruptcy Law are initiated for the relief of debtors by or against CCBC or any of its subsidiaries and, if instituted against CCBC or any of its subsidiaries by a third party, are not be dismissed within 30 days of their initiation; (8) CCBC breaches any covenant or other term or condition of the Sale CN in any material respect, except, if such breach which can be remedied is not remedied within 30 days of CCBC becoming aware of its occurrence; (9) an event or series of events shall have occurred after the date of issuance of the Sale CN, that has or reasonably could be expected to have, a material adverse effect, except, if the consequences which are curable have not been cured within 30 days; or (10) a final judgment or judgments for the payment of money aggregating in excess of US$10,000,000 are rendered against CCBC or any of its subsidiaries and which judgments are not, within 30 days after the entry thereof, vacated, bonded, discharged or stayed pending appeal, or are not discharged within 30 days after the expiration of such stay. Trading Day shall mean any day on which the CCBC Shares are traded on the NYSE; provided that Trading Day shall not include any day on which the CCBC Shares are scheduled to trade on such exchange or market for less than four hours or any day that the CCBC Shares are suspended from trading during the final hour of trading on such exchange or market. Transferability : Subject to applicable laws, the Sale CN may be offered, sold, assigned or transferred by its holder without the consent of CCBC. INFORMATION ON THE GROUP The Group is China s leading integrated-healthcare device and service operator as substantiated by CCBC, a major subsidiary of the Company and currently the largest cord blood bank operator in the PRC which, through its subsidiaries and an 13

14 associated company holds four of the seven cord blood bank licenses that have been issued in the PRC. The Group is also the first medical device enterprise that was publicly listed outside the PRC on the Stock Exchange. The Group is involved in five different business segments, namely (i) the medical devices segment, which has been the principal business of the Group since its listing on the Stock Exchange in 2001; (ii) the cord blood storage segment, which is listed, through the Company s subsidiary, CCBC, on the NYSE; (iii) the hospital management segment; (iv) the medical insurance administration segment; and (v) the Chinese herbal medicine segment. INFORMATION ON THE VENDOR The Vendor is a company incorporated in the Cayman Island with limited liability and has not engaged in any business other than in connection with holding of the Sale CN. As at the date of this announcement, the Vendor is indirectly wholly-owned by Mr. Kam, being (i) an executive Director and chairman of the Company; and (ii) a shareholder, a director and the chairman of CCBC who held approximately 357,331 CCBC Shares, representing approximately 0.45% of the entire issued and outstanding share capital of CCBC as at the date of this announcement. The original cost for the acquisition of the Sale CN to Mr. Kam, being the ultimate beneficial owner of the Vendor, was the aggregate of (i) US$161,784, (equivalent to approximately HK$1,253,827,959), which is equivalent to the Consideration; and (ii) (if applicable) an amount equivalent to the Additional Payment. INFORMATION ON CCBC CCBC is a company incorporated in the Cayman Islands with limited liability whose shares are listed on the NYSE. CCBC is the first and largest umbilical cord blood banking operator in terms of geographical coverage in the PRC and is the only cord blood banking operator with multiple licenses in the PRC. CCBC provides cord blood collection, testing, hematopoietic stem cell processing and stem cells storage services. SHAREHOLDING STRUCTURE OF CCBC As at the date of this announcement, there were 80,083,248 issued and outstanding CCBC Shares, of which the Company indirectly held 30,681,266 CCBC Shares, representing approximately 38.31% of the entire issued and outstanding share capital of CCBC. 14

15 Upon full conversion of the Sale CN at the Conversion Price, 22,903,454 CCBC Conversion Shares will be issued, which represents approximately 28.60% and 22.24% of the total existing issued and outstanding share capital of CCBC as at the date of this announcement and the total share capital of CCBC as enlarged by the issue of the said CCBC Conversion Shares respectively. Set out below is the shareholding structure of CCBC as at the date of this announcement and in other scenarios assuming (i) immediately after Completion and only the Sale CN are fully converted; (ii) immediately after Completions and the CNs are fully converted, in each case at the Conversion Price: As at the date of this announcement No. of Approximate shares % Immediately after Completion and assuming full conversion of the Sale CN at the Conversion Price No. of shares Approximate % Immediately after Completions and assuming full conversion of the CNs at the Conversion Price No. of shares Approximate % The Company (Note 1) 30,681, ,584, ,516, Mr. Kam 357, , , Kent C. McCarthy (Note 2) 6,766, ,766, ,766, CGL 7,314, ,314, Other shareholders 34,963, ,963, ,963, Total 80,083, ,986, ,604, Notes: (1) 30,681,266 CCBC Shares are held by Golden Meditech Stem Cells (BVI) Company Limited, a wholly-owned subsidiary of the Company. (2) These 6,766,718 CCBC Shares includes (i) 5,056,592 ordinary shares held by Jayhawk Private Equity Fund II, L.P.; (ii) 911,119 ordinary shares held by Jayhawk China Fund (Cayman), Ltd.; (iii) 362,861 ordinary shares held by Kent C. McCarthy Revocable Trust dated October 24, 2003 (the Revocable Trust ); and (iv) 436,146 ordinary shares held by GRAT 6 Under Kent C. McCarthy GRAT Tr Dtd ( GRAT 6 ). 15

16 Mr. Kent C. McCarthy is the manager of Jayhawk Private Equity, LLC, which is the general partner of Jayhawk Private Equity GP II, L.P. Jayhawk Private Equity GP II, L.P. is the general partner of Jayhawk Private Equity Fund II, L.P. As a result, Mr. McCarthy, Jayhawk Private Equity, LLC and Jayhawk Private Equity GP II, L.P. are deemed to be beneficial owners of the securities owned of record by Jayhawk Private Equity Fund II, L.P. Mr. McCarthy is also the manager of Jayhawk Capital Management, LLC, which is the general partner of Jayhawk China Fund (Cayman), Ltd. As a result, Mr. McCarthy and Jayhawk Capital Management, LLC are deemed to be beneficial owners of the securities owned of record by Jayhawk China Fund (Cayman), Ltd. Mr. McCarthy is a trustee of the Revocable Trust. As a result, Mr. McCarthy is deemed to be beneficial owner of the securities owned of record by the Revocable Trust. Mr. McCarthy is the beneficiary of GRAT 6. As a result, Mr. McCarthy is deemed to be beneficial owner of the securities owned of record by GRAT 6. Upon the Completion and assuming full conversion of the Sale CN, the shareholding in CCBC held by the Company will increase from approximately 38.31% to 52.03%. Upon the Completions and assuming full conversion of the CNs, the shareholding in CCBC held by the Company will increase from approximately 38.31% to 65.10%. Under each of the above scenarios, CCBC will continue to be a non wholly-owned subsidiary of the Company and, therefore, the financial results, assets, liabilities and cash flows of the CCBC Group will continue to be consolidated into the Group s consolidated financial statements in accordance with HKFRS. FINANCIAL INFORMATION ON CCBC According to the audited consolidated financial statements of CCBC prepared in accordance with HKFRS, the net assets value attributable to equity shareholders of CCBC as at 31 March 2015 amounted to approximately HK$1,314,318,000. The financial information extracted from the audited consolidated financial statements of CCBC prepared in accordance with HKFRS for the financial years ended 31 March 2014 and 2015 respectively is set out below: For the year ended 31 March HK$ (audited) HK$ (audited) Revenue 722,167, ,555,000 Loss before taxation (115,800,000) (54,603,000) Loss for the year (191,305,000) (115,638,000) 16

17 REASONS FOR AND BENEFITS OF THE CN ACQUISITION Over the past years, the Group had been exploring and investigating suitable businesses and acquisition opportunities within the PRC healthcare industry. At the same time, the Group also considered its overall strategy and business performance of each division of its business. Therefore in 2014, the Company disposed of its 7% senior convertible notes issued by CCBC due 2017 in an aggregate principal amount of US$50,000,000 for US$88,090,000 to Magnum and CGL with a view to enhancing the Group s financial resources to fund its potential acquisitions or expansion opportunities as disclosed in the paragraph headed Use of Proceeds from the Disposal of the Convertible Note in the circular of the Company dated 16 September Since then, the Company had explored the possibilities of acquiring several potential projects, including but not limited to (i) a project in respect of a high-end medical centre in Shanghai which, after having conducted due diligence work, the Board concluded that such project had excessive business risks as it adopted a non-compliant revenue recognition policy with unstable client base; (ii) a project in respect of an online insurance distribution platform which, after having conducted due diligence work, the Board concluded that such project did not possess a justified risk and reward profile due to the increase of homogeneity of similar platform in the PRC and a volatile revenue pattern; and (iii) a project relating a foreign cord blood bank operator which, after having conducted due diligence work, the Board concluded that such project had unjustifiable investment risk as it was a loss-making business and was exposed to fierce competition in its place of business. After these explorations, investigations and consideration, the Group found that these emerging business opportunities induced excessive execution and commercialisation risk and contained a highly unpredictable future revenue stream. In contrast, cord blood storage service has been gradually gaining market and consumer acceptance in the PRC, thanks to rising public awareness, subscription of cord blood banking services and clinical usage. CCBC has over a decade long of operational history and it is currently the largest cord blood banking operator in the PRC. It has a successful track record in executing its expansion strategy and recruiting new subscribers, hence, the management of the Company believes that the CCBC business and operational model is more stable and predictable as substantiated by (i) the expected stable growth of new subscribers as the birth rate in the PRC maintained at approximately 1.2% of the annual average population over the past ten years according to the statistics published by the National Bureau of Statistics of the PRC ( ); and (ii) the achievement of economies of scale as the number of units stored at the cord blood bank facilities increased gradually over the past few years as compared to other new consumer healthcare ventures within the PRC. In 17

18 addition, CCBC directly services end consumers, therefore, it helps diversifying the Company s revenue stream and further paves the way into the consumer healthcare segment. As such, the Company entered into the Agreement so as to increase the Company s exposure in the PRC cord blood banking industry. As at the date of this announcement, the Company intended to convert the Sale CN into CCBC Conversion Shares after (i) the board of directors of CCBC, acting upon the recommendation of the CCBC Special Committee, resolved to recommend the approval of the CCBC Shares Acquisition by the shareholders of CCBC and (ii) CCBC has entered into a legally binding conditional agreement in relation to the CCBC Shares Acquisition with the Company. If any of the above conditions is not satisfied, the Company may decide not to convert or may otherwise postpone the conversion of the Sale CN. If the proposed CCBC Shares Acquisition does not occur, the Company intended to hold the Sale CN until the Company considers that it is in the best interest of the Group and the Shareholders to convert them into CCBC Conversion Shares. As at the date of this announcement, the Board anticipated that it would consider, among other things, the capital market condition and the share price of CCBC at the relevant time, the maturity date of the Sale CN and whether any strategic and/or financial benefits could be produced before determining whether to convert the Sale CN. Taking into consideration of the above, the Directors (excluding the independent non-executive Directors whose views will be given after taking into account the advice given by the Independent Financial Adviser) consider that the terms of the Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole. LISTING RULES IMPLICATIONS As one or more of the applicable percentage ratios under Rule of the Listing Rules in respect of the CN Acquisition, when aggregated with Magnum CN Acquisition and the CGL Acquisition, exceeds 25% but all of them are below 100%, the CN Acquisition constitutes a major transaction of the Company under Chapter 14 of the Listing Rules, and is therefore subject to the reporting, announcement and shareholders approval requirements. As at the date of this announcement, Mr. Kam is (i) an executive Director and chairman of the Company; and (ii) a director and the chairman of CCBC and is therefore a connected person of the Company. As the Vendor is indirectly wholly-owned by Mr. Kam, the Vendor is an associate of Mr. Kam and, therefore, is a connected person of the Company. Accordingly, the CN Acquisition also constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules and 18

19 is subject to the reporting, announcement and independent shareholders approval requirements under Chapter 14A of the Listing Rules. To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, save for Mr. Kam, an executive Director, none of the Directors have a material interest in the CN Acquisition. Mr. Kam had abstained from voting on the Board resolution(s) for the approval of the CN Acquisition. The Vendor and its associates will be required to abstain from voting on the resolution(s) in relation to the Agreement and the transactions contemplated thereunder at the EGM. To the best knowledge, information and belief of the Directors, having made all reasonable enquiries, save for Bio Garden(an associate of the Vendor by virtue of it being controlled by Mr. Kam) holding 1,114,354,302 Shares, representing approximately 37.68% of the total issued share capital of the Company as at the date of this announcement, no other Shareholders will be required to abstain from voting on the resolution(s) to approve the Agreement and the transactions contemplated thereunder at the EGM. GENERAL The Independent Board Committee (comprising the independent non-executive Directors) has been formed to advise the Independent Shareholders on the Agreement and the transactions contemplated thereunder As at the date of this announcement, the Independent Financial Adviser has not been appointed yet. The Company will issue an announcement after the Independent Financial Adviser has been appointed. The EGM will be convened and held for the Independent Shareholders to consider, and if thought fit, to approve, the Agreement and the transactions contemplated thereunder. A circular containing, among other things, (i) further information on the Agreement and the transactions contemplated thereunder; (ii) financial information of the Group and the CCBC Group; (iii) pro forma financial information on the enlarged group; (iv) the recommendation of the Independent Board Committee in relation to the CN Acquisition; (v) a letter from the Independent Financial Adviser containing their advice on the CN Acquisition to the Independent Board Committee and the Independent Shareholders; and (vi) notice of the EGM, will be despatched to the Shareholders on or before 18 December 2015 as additional time is required for the preparation of the relevant information for inclusion in the circular. 19

20 Completion is subject to the fulfillment of the conditions precedent set out in the Agreement and therefore may or may not occur. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares. DEFINITIONS In this announcement, unless the context otherwise requires, the following terms shall have the following meanings: Additional Payment has the meaning given to it in the section headed Additional Payment in this announcement Agreement the conditional sale and purchase agreement dated 3 November 2015 entered into between the Company and the Vendor in respect of the CN Acquisition associate Base Acquisition Price Bio Garden Board Business Day(s) BVI CCBC CCBC Conversion Share(s) has the meaning ascribed to it under the Listing Rules US$6.40 per CCBC Share Bio Garden Inc., a company incorporated in the BVI with limited liability which is wholly-owned by certain discretionary trusts of which Mr. Kam was the founder the board of Directors a day that is not a Saturday, Sunday or public holiday in Hong Kong, or on which a tropical typhoon warning no.8 or above or a black rainstorm warning signal is hoisted in Hong Kong at any time between 9:00am and 5:00pm Hong Kong time. British Virgin Islands China Cord Blood Corporation, a company incorporated in the Cayman Islands with limited liability, a non-wholly-owned subsidiary of the Company and whose shares are listed on the NYSE new CCBC Share(s) to be issued upon conversion of the Magnum CN and/or the CGL CN and/or the Sale CN at the Conversion Price, as the case may be 20

21 CCBC Group CCBC Share(s) CCBC Shares Acquisition CGL CGL Acquisition CCBC and its direct and indirect subsidiaries ordinary share(s) of US$ per share in the share capital of CCBC the proposed acquisition by the Company or one of its controlled affiliates of the outstanding CCBC Shares not currently owned by the Company or its affiliates pursuant to a merger of CCBC with a controlled affiliate of the Company, resulting in a delisting of CCBC from the NYSE Cordlife Group Limited, a company incorporated under the laws of Singapore with limited liability and whose shares are listed on the Singapore Exchange Securities Trading Limited the acquisition of the CGL CN and the Sale CCBC Shares by the Company pursuant to the CGL Agreement CGL Agreement the conditional sale and purchase agreement dated 8 May 2015 entered into between the Company and CGL in respect of the CGL Acquisition CGL CN the 7% senior convertible note issued by CCBC due October 2017 in an aggregate outstanding principal amount of US$25,000,000 convertible into the CCBC Conversion Shares CN Acquisition the proposed acquisition of the Sale CN by the Company pursuant to the Agreement CNs collectively, the Sale CN, the Magnum CN and the CGL CN Company Golden Meditech Holdings Limited, a company incorporated in the Cayman Islands with limited liability and whose shares are listed on the main board of the Stock Exchange Completion completion of the sale and purchase of the Sale CN in accordance with the provisions of the Agreement 21

22 Completion Date Completions connected person(s) Conversion Price Consideration Conversion Price Director(s) Distribution EGM Final Acquisition Price Group HK$ HKFRS the date falling on the 7th Business Day following the date on which the last of the conditions under the Agreement has been fulfilled or such other date as the Vendor and the Purchaser may agree in writing collectively, the Completion and completions of the Magnum CN Acquisition and the CGL Acquisition has the meaning ascribed to it under the Listing Rules US$2.838 per CCBC Conversion Share US$161,784,252.78, being the consideration for the CN Acquisition, details of which are set out in the section headed Consideration in this announcement US$2.838 per CCBC Conversion Share director(s) of the Company a dividend or other distribution declared or paid by CCBC to the holders of CCBC Shares the extraordinary general meeting of the Company to be held for the Independent Shareholders to consider, if thought fit, approve the Agreement and the transactions contemplated thereunder the sum of (i) the consideration per CCBC Share paid to holders of CCBC Shares upon completion of the CCBC Shares Acquisition pursuant to the definitive agreements of the CCBC Shares Acquisition (including any amendments thereto, if any) and (ii) the amount per CCBC Share of all Distributions declared after the KKR SPV Shares Completion Date and prior to the closing of the CCBC Shares Acquisition the Company and its subsidiaries Hong Kong dollar, the lawful currency of Hong Kong Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants 22

23 Hong Kong Independent Board Committee Independent Financial Adviser Independent Shareholders KKR SPV Shares Acquisition KKR SPV Shares Agreement KKR SPV Shares Completion Date Listing Rules Long Stop Date the Hong Kong Special Administrative Region of the PRC the independent board committee, comprising all the independent non-executive Directors, which has been formed to advise the Independent Shareholders in respect of the Agreement and the transactions contemplated thereunder the independent financial adviser to be appointed to advise the Independent Board Committee and the Independent Shareholders on the Agreement and the transactions contemplated thereunder Shareholders other than those who are required by the Listing Rules to abstain from voting on the resolution(s) approving the Agreement and the transactions contemplated thereunder the acquisition of the entire share capital of the Vendor pursuant to the KKR SPV Shares Agreement which was completed on the KKR SPV Shares Completion Date the conditional sale and purchase agreement dated 26 August 2015 and entered into between Brilliant China Healthcare Investment Limited and Magnum Opus 2 International Holdings Limited in respect of the KKR SPV Shares Acquisition 26 August 2015, being the date on which completion of the KKR SPV Shares Acquisition occurred the Rules Governing the Listing of Securities on the Stock Exchange 29 February 2016 or such other date as the Vendor and the Company may agree Magnum Magnum Opus International Holdings Limited, a company incorporated under the laws of the BVI with limited liability which is wholly-owned by Mr. Kam 23

24 Magnum 2 Magnum Opus 2 International Holdings Limited, a company incorporated under the laws of the BVI with limited liability which is wholly-owned by Mr. Kam Magnum Agreement the conditional sale and purchase agreement dated 8 May 2015 entered into between the Company and Magnum in respect of the Magnum CN Acquisition Magnum CN Magnum CN Acquisition Mr. Kam NYSE PRC the 7% senior convertible note issued by CCBC due October 2017 in an aggregate outstanding principal amount of US$25,000,000 convertible into the CCBC Conversion Shares the acquisition of the Magnum CN by the Company pursuant to the Magnum Agreement Mr. Kam Yuen, an executive Director and chairman of the Company the New York Stock Exchange, Inc. or any successor thereto the People s Republic of China, and for the purpose of this announcement, excluding Hong Kong, Macau and Taiwan Proposal Letter the non-binding proposal letter dated 27 April 2015 issued by the Company to the board of directors of CCBC in relation to acquiring all the CCBC Shares which are not already directly or indirectly owned by the Company at US$6.40 in cash per CCBC Share RMB Sale CCBC Shares Sale CN Renminbi, the lawful currency of the PRC all the CCBC Shares beneficially owned, directly or indirectly, by CGL as of the completion of the CGL Agreement, being 7,314,015 CCBC Shares as at the date of this announcement the 7% senior convertible notes issued by CCBC due April 2017 in an aggregate outstanding principal amount of US$65,000,000 convertible into the CCBC Conversion Shares 24

25 SFO Share(s) Shareholder(s) Stock Exchange Total Consideration US$ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) ordinary share(s) of HK$0.20 each in the share capital of the Company as at the date of this announcement holder(s) of the Share(s) The Stock Exchange of Hong Kong Limited the total consideration payable for the CN Acquisition under the Agreement, being the Consideration and, if applicable, the Additional Payment additionally United States dollars, the lawful currency of the United States of America Vendor Excellent China Healthcare Investment Limited, a company incorporated in the Cayman Islands with limited liability which is indirectly wholly owned by Mr. Kam through Magnum 2 % per cent Unless specified otherwise, conversion of US$ into HK$ is based on the exchange rate of US$1.00 to HK$7.75 and conversion of RMB into HK$ is based on the exchange rate of RMB1.00 to HK$1.25. The exchange rates have been used, where applicable, for the purpose of illustration only and do not constitute a representation that any amounts were or may have been exchanged at this or any other rates or at all. Hong Kong, 3 November 2015 By Order of the Board Golden Meditech Holdings Limited KAM Yuen Chairman As at the date of this announcement, the Board comprises 9 directors. The executive Directors are Mr. Kam Yuen (Chairman), Mr. Kong Kam Yu and Mr. Yu Kwok Kuen, Harry, the non-executive Directors are Ms. Zheng Ting and Mr. Gao Yue and the independent non-executive Directors are Prof. Cao Gang, Mr. Feng Wen, Prof. Gu Qiao and Mr. Daniel Foa. 25