Temasek-backed firms buy stake in VIVA Biotech unit ahead of listing

(Reuters) – Entities backed by Singapore’s Temasek and Chinese investment firm HighLight Capital agreed to a deal worth 1.06 billion yuan ($148.7 million) for stakes in a unit of VIVA Biotech Holdings, the pharmaceutical service company said late on Sunday.

The deal, which will dilute VIVA Biotech’s stake in VIVA Shanghai to about 75.79% from 100%, comes as the Chinese drug discovery and manufacturing service provider plans to restructure its businesses and list the Shanghai firm on a onshore stock exchange.

VIVA Biotech said it will use the net proceeds to redeem convertible bonds in a bid “to settle its outstanding liabilities without occupying its internal resources.”

The deal included capital injection into VIVA Shanghai by new investors and sale of existing interest in VIVA Shanghai from Viva Investment, another unit of VIVA Biotech, the filing showed.

Daxue Investments, a unit of Temasek Holdings, and True Light P, a private firm held by Temasek-owned True Light Capital GP Pte. Ltd, will altogether hold 17.55% stake in VIVA Shanghai after the deal, according the filing.

HLC SPV and Qingdao Hongyi, both linked to HighLight Capital, will obtain a total of 6.66% stake from the transaction.

VIVA Biotech has initiated a restructuring which will transfer all assets and personnel related to its early-stage drug discovery business to VIVA Shanghai, and move out of the Shanghai unit any assets and personnel related to drug development and manufacturing service, the filing showed.

Investors in the deal expect application for VIVA Shanghai’s initial public offering to be filed by June 30, 2024, said the filing.

($1 = 7.1273 renminbi)