Shanghai Zhangjiang Hi-Tech Park Development Co. said it will increase its investment in wholly-owned subsidiary Haocheng Venture Capital Co. by 48 million yuan to help Haocheng buy a 0.4 percent stake in Shandong Buchang Pharmaceutical Co.
In a Sept 23 statement to the Shanghai Stock Exchange, Zhangjiang Hi-Tech said Shenzhen China Euro Capital Co. has signed an agreement to sell the stake.
Zhangjiang Hi-Tech investor relations official Xu Lei told Caijing that the stake purchase is in line with the company\'s practice of investing in technology firms in support of its core business of developing industrial parks.
Buchang Pharmaceutical, which is preparing for a listing, is starting to integrate the pharmaceutical-related assets of parent Buchang Group.
Haocheng Venture Capital has attached a buyback provision in the sale agreement, under which Shenzhen China Euro Capital will be obliged to repurchase the stake if Buchang Pharmaceutical does not list by Dec. 31, 2013.
Buchang Group\'s pharmaceutical assets, which include traditional Chinese medicines, booked net profit of 550 million yuan and 700 million yuan in 2007 and 2008 respectively. In 2009 net profit is forecast at 900 million yuan.
Zhangjiang Hi-Tech said in an earlier statement that Haocheng plans to invest 198 million yuan to set up a 99 percent-held investment joint venture.
Zhangjiang Hi-Tech closed down 2.89 percent at 13.09 yuan on Sept. 23.