Cordlife Group proposed a 1-cent dividend after its FY2014 net profit surged by 125.3% year-on-year to S$30.4 million. Company photo
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Cordlife Group ups stake in China Cord Blood Corporation
CORDLIFE GROUP is upping its interest in China Cord Blood Corporation (CCBC) by acquiring a 7% US$25 million senior convertible note due 3 October 2017 issued by the leading PRC cord blood banking operator.
The note issue also includes another tranche of US$25 million to Magnum Opus International Holdings, a personal investing vehicle of CCBC chairman Yuen Kam.
Cordlife currently owns a 10.02% stake in CCBC. If all the notes are converted, Cordlife’s interest will be raised to 17.79% of CCBC’s enlarged share capital.
The note is expected to provide a total internal rate of return of 12% for Cordlife.
'The key management of CCBC increasing their shareholdings is a vote of confidence on its business outlook,' said Cordlife CEO Jeremy Yee. NextInsight file photoCordlife will pay US$44.045 million for the note issue, which was priced based on the book value and share price of CCBC.
Cordlife will also extend a US$46.5 million loan to Magnum to help finance its take-up of the convertible note issued by CCBC.
Cordlife’s interest in CCBC provides exposure to 3 of the 7 regions in PRC licensed for cord blood banking.
Since Cordlife’s initial investment in CCBC in August 2012, CCBC has increased its subscriber base and enhanced its ability to generate cash.
Cordlife posted a revenue surge of 41.5% year-on-year to reach S$49.1 million for FY2014, thanks to increased client deliveries from newly acquired operations in the Philippines, India and Indonesia.
Net profit was up 125.3% at S$30.4 million.
It has proposed a final dividend of 1 cent per share, payable on 7 November.
Taking into account its 1-cent interim dividend, the dividend yield is 1.6% based on a recent stock price of S$1.245.
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