Shandong Weigao Group Medical Polymer Co. Ltd. terminated a series of transactions involving the sale of its subsidiary Shandong Weigao Orthopaedic Device Co. Ltd. to Zhuhai Winbase International Chemical Tank Terminal Co. Ltd. due to uncertainty on the regulatory policy.
The company had agreed to sell an 81% stake in Shandong Weigao Orthopaedic in June 2016 for about 4.91 billion Chinese yuan.
In the process, Shandong Weigao Orthopaedic would end up going public through an indirect listing. Zhuhai Winbase planned to buy the rest of 19% of Shandong Weigao Orthopaedic from minority shareholders for 1.15 billion yuan by issuing new shares.
Separately, Shandong Weigao Group agreed to buy Zhuhai Shi You Chemical Co. Ltd.'s 43.3% stake in Zhuhai Winbase International for 1.42 billion yuan. In exchange, Shandong Weigao Group would transfer its entire equity stake in its unit Shandong Weigao Group Logistic, which now held Zhuhai Winbase International assets, to Zhuhai Shi You Chemical.
After the completion of all these transactions, Zhuhai Winbase International would become a direct non-wholly owned subsidiary of Shandong Weigao Group with a stake of 53.6%. As a result, Shandong Weigao Group would also have ended up owning 53.6% stake in Shandong Weigao Orthopaedic.
With the termination, the company said there would be no material adverse impact on the existing business or financial position of the group.