Origin Agritech Receives RMB 152 million as First Payment of Commercial Seed Business Sale
DES MOINES, Iowa, Aug. 24, 2017 /PRNewswire/ -- Origin Agritech Ltd. (Nasdaq: SEED) ("the Company" or "Origin"), an agricultural biotechnology trait and corn seed provider, today announced that it has received the first payment from the Company's RMB 421 million sale of its proprietary China-based commercial corn seed production and distribution business, originally announced on September 27, 2016.
The consideration for the first part of the asset sale will be paid by Beijing Shihui Agricultural Development Co, Ltd ("Beijing Shihui") in several tranches aggregating RMB 221 million, including RMB 152 million paid today from the buyer in a combination of cash and assumption of debt. Beijing Shihui will make two additional payments totaling RMB 69 million to be paid prior to November 15, 2017. A second and final payment of up to RMB 200 million, including the initial RMB 10 million down payment, subject to certain set offs is expected no later than December 15, 2017.
"This marks a critical milestone achievement in our journey to becoming a leading international corn seed technology company," said Dr. Bill Niebur, Origin CEO. "The proceeds significantly accelerate and expand our capabilities to develop and deliver corn biotechnology traits and corn product licensing business within China and around the globe. All current indicators point to a near-term commercial launch for the projected USD 5-6 billion GM-traited corn seed market in China. Origin's leading corn germplasm collection and biotech trait platform are well positioned to monetize the novel business opportunity and strong customer demand for superior products."
"China remains the primary focus for Origin near term. Our portfolio of collaborations with leading agricultural multinationals, Chinese domestic seed companies and leading academic institutions uniquely positions us to realize the near and long term commercial potential of our 20-years' investment in serving farmers through biotechnology and genetics."
"We see very exciting opportunities in the coming months and years with this new business model and we look forward to sharing more news on our growth story with investors," concluded Niebur.
Under the terms of the Beijing Shihui agreement, Origin will retain its corn breeding and biotech research programs; all intellectual properties, which include an industry-leading corn germplasm collection, GM trait portfolio and modern laboratories; extensive field testing networks; and off-season winter nursery in Hainan, with which Origin plans to expand and pursue germplasm and trait licensing opportunities. Origin will also maintain its "Green Pass" status, allowing the competitive advantage of introducing new hybrid varieties to the Chinese market through an expedited and more predictable government approval process.
About Origin Agritech Ltd.
Origin Agritech Limited, founded in 1997 and headquartered in Zhong-Guan-Cun (ZGC) Life Science Park in Beijing, is China's leading agricultural biotechnology company, specializing in crop seed breeding and genetic improvement, seed production, processing, distribution, and related technical services. Leading the development of crop seed biotechnologies, Origin Agritech's phytase corn was the first transgenic corn to receive the Bio-Safety Certificate from China's Ministry of Agriculture. Over the years, Origin has established a robust biotechnology seed pipeline including products with glyphosate tolerance and pest resistance (Bt) traits. Origin operates production centers, processing centers and breeding stations nationwide with sales centers located in key crop-planting regions. Product lines are vertically integrated for corn, rice and canola seeds. For further information, please visit the Company's website at: http://www.originseed.com.cn or http://www.originseed.com.cn/en/.
Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," "target," similar expressions, and variations or negatives of these words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the consummation of the proposed transaction and the anticipated benefits thereof. Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company's control. Some of the important factors that could cause the company's actual results to differ materially from those projected in any such forward-looking statements are: failure to develop and market new products and optimally manage product life cycles; ability to respond to market acceptance for our seed products; rules, regulations and policies affecting products based on biotechnology; outcome of significant litigation and environmental matters, including realization of associated indemnification assets, if any; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; security threats, such as acts of sabotage, terrorism or war, natural disasters and weather events and patterns which could affect products for the agriculture industry; and ability to protect and enforce the company's intellectual property rights. The company undertakes no duty to publicly revise or update any forward-looking statements as a result of future developments, or new information or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.
SOURCE Origin Agritech Limited
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