9th Dec 2015 08:11
LONDON (Alliance News) - Hutchison China MediTech Ltd said Wednesday that its joint venture Shanghai Hutchison Pharmaceuticals Ltd has agreed to surrender its remaining 36 years of land-use rights on an old factory site in Shanghai, netting compensation of around USD105.0 million.
The rights cover a 58,000 square metre old factory site in Taopu Town, in the Putou District of Shanghai. The area was re-zoned in 2014 from industrial use into usage as a new science, technology, commercial and residential development area called Smart City. The re-zoning of the site prompted China MediTech to develop a new factory in Fengpu district, designed to accommodate around three times more production capacity.
The company began construction of the new factory in 2014, and a full transition in production from the old factory to the new is expected to be completed by mid-2016.
The agreement was signed with the Land Development Centre of Putuo District and Shanghai Taopu Smart City of Science and Technology Development And Construction Co Ltd. It will receive the compensation in three stages over a period of around once year.
"This is good news. The move to our new factory in Fengpu has been a major effort for the SHPL team and positions us well for the future with a tripling of production capacity. This modern facility will support continued business expansion and further scale efficiency at SHPL. Meanwhile, we plan to use the cash compensation to pay off debt, retain cash for working capital and look to pay dividends to the shareholders of SHPL," said Chief Executive Officer Christian Hogg in a statement.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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