Key Takeaways
Lifetech Scientific Corp. agreed to acquire a 96.46% stake in medical device maker Huayi Shengjie for approximately RMB1.87 billion, financed entirely by convertible bonds.
The deal was disclosed in a legally binding framework agreement between Lifetech Sci and AUT-VII, a wholly-owned subsidiary of Hillhouse Capital, the company announced.
The three-year convertible bonds carry a 3.5% annual interest rate. They have an initial conversion price of HKD2.5 per share, an 8.23% premium over Lifetech Sci's last closing price of HKD2.31.
Upon full conversion, Hillhouse Capital would become the single largest shareholder in Lifetech Sci, holding approximately 15.66% of the enlarged share capital through the issuance of 860 million new shares.
The acquisition positions Lifetech Sci to absorb a significant domestic manufacturer of congenital heart defect occluders, strengthening its footprint in the medical device sector. By using convertible bonds, the company avoids immediate cash expenditure for the acquisition, instead leveraging its equity.
For investors, the transaction signals strong confidence from a major investment firm, but also introduces the potential for future share dilution. The key catalyst will be the completion of the deal, which will make Huayi Shengjie a non-wholly owned subsidiary of Lifetech Sci.
This article is for informational purposes only and does not constitute investment advice.
