Fosun Pharma Sells Gland Stake for US$294 Million, Plans H-Share Buyback

Shanghai-based Fosun Pharma has sold a 6 percent stake in Indian drugmaker Gland Pharma for about US$294 million and separately announced plans to buy back up to HK$1 billion of its Hong Kong-listed shares.

The two moves were disclosed on September 6. Fosun said proceeds from the stake sale would mainly support research and development, share repurchases and repayment of interest-bearing debt.

Its Singapore subsidiary sold 9.897 million Gland shares through block trades and market transactions on September 4, according to a company filing. The consideration totaled 27.996 billion Indian rupees before commissions and taxes, at an average price about 2.72 percent below the previous trading day's close.

Fosun's holding will fall from about 51.76 percent to 45.76 percent following the transaction. It will remain Gland's controlling shareholder and continue to consolidate the Indian company's financial results. The filing scheduled the share transfer for September 7.

Fosun said the disposal would increase its net assets but would not be recorded as investment income in its income statement because it was selling part of a subsidiary while retaining control. The final financial impact remains subject to audit.

Gland, based in Hyderabad, manufactures injectable medicines and derives most of its revenue from the United States and Europe. Fosun acquired a controlling stake in the company in 2017.

Under the separate buyback plan, Fosun may cancel the repurchased H shares or hold them as treasury shares. The announced HK$1 billion is a spending ceiling, rather than an amount already spent.

Fosun told National Business Daily that it remained confident in Gland's long-term development and its role in the group's overseas business.