MediWelcome (02159.HK) to Sell Partial Stake in Beijing Lingchuang Yigu for RMB 15 Million

Intelligent Finance APP reported that MediWelcome (02159) announced that on September 30, 2023, Beijing MediWelcome (one of the Group's operating entities in China), Seller 1 (Shenzhen Tongchuang Zhongke Qianhai Kekong Angel Venture Investment Partnership (Limited Partnership)), Seller 2 (Beijing Tongchuang Shared Medical Equity Investment Fund Partnership (Limited Partnership)), the investor, existing shareholders, and the target company (Leadinno Medical Valley) entered into the agreement. According to the agreement, the investor agreed to subscribe for the registered capital of the target company at a total consideration of RMB 52.5 million (the "Subscription"); and the sellers conditionally agreed to sell, while the investor conditionally agreed to acquire the sale equity interest (equivalent to 7.7893% of the enlarged target company after the Subscription), at a total consideration of RMB 52.5 million (the "Sale"). Among which, Beijing MediWelcome conditionally agreed to sell 2.2255% equity interest in the target company for a consideration of RMB 15 million.

The investors include Beijing Dacheng Fortune SME Development Fund Partnership (Limited Partnership), Shenzhen Fortune Wisdom Private Equity Investment Enterprise (Limited Partnership), and Yangzhou Qifeng Venture Capital Partnership (Limited Partnership).As of the date of this announcement, the target company is respectively owned by the existing shareholders, Medi Welcome, Seller 1, Seller 2, and 10 other entities (each holding less than 10% of the target company’s equity) with equity stakes of 44.85%, 4.52%, 4.88%, 11.85%, and 33.90%. Upon completion of the sale, the Group will hold a 2.0104% equity stake in the target company.

The business scope of the target company includes technology development, technology consulting, technical services, technology transfer, and technology promotion; organizing exhibitions and displays; conference services; computer system services; corporate planning, translation services; machinery and equipment leasing; sales of office supplies, computer software and hardware and auxiliary equipment, medical devices (Class I only); goods import and export; technology import and export; agency import and export.

The Group acquired the interests in the target company for investment purposes. The target company incurred losses during the two years ended December 31, 2022, and the six months ended June 30, 2023, and the Group has not received any dividends from the target company since the acquisition. Considering the performance and return on investment of the target company, the Company believes that the sale represents a good opportunity for the Group to reduce its equity interest in the target company and recover its investment through the sale. The proceeds from the sale are currently intended to be used for the Group's general working capital.