BEIJING, Oct. 29, 2019 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), an agriculture technology and rural e-commerce company, updates the progress of Biotech Commercialization joint venture with Beijing Changping Technology Innodevelop Group (BC-TID). On June 5, 2019, the Company announced that the Company entered into a Cooperation Framework Agreement with BC-TID to form a new joint venture to focus on the commercialization of genetically modified (GM) corn seed technologies.
Under the agreement, Origin and BC-TID will establish a new entity with approximately equal partnership. The Company will contribute the Origin Life Science Center building in Beijing and two biotech corn traits to the new joint venture, and BC-TID will fund the joint venture with a total of RMB204 million. The two biotech traits are the glyphosate tolerance (Gt) trait and the double stacked traits of insect resistance (Bt) and Gt genes. These two traits have completed multi-year production tests, and we have submitted the application for the final stage of biosafety approval in April to China's Ministry of Agriculture.
Since the Cooperation Framework Agreement was signed, both parties are actively involved to complete the formation of joint venture. However, the process took longer than we originally expected mainly due to the complicated tax related issues with the Origin Life Science Center building in Beijing. Both parties now agreed to use Beijing Origin Seed Limited (Beijing Origin) as the joint venture entity in order to expediate the process. The original term remains the same and both parties are cooperating to complete the process as soon as possible. Due diligence has been completed and BC-TID has deposited RMB15 million (US$2.1 million) in an escrow account.
Beijing Origin has been the operating company for the Company's Chinese seed business and is controlled by the Company through a series of stock consignment agreements. The Company will transfer the seed business from Beijing Origin to Beijing Origin State Harvest Biotechnology Limited (State Harvest), which is the Company's wholly owned entity in China. After the changes and investment from BC-TID, Beijing Origin will become a joint venture of the Company and BC-TID, and will have the assets of the Origin Life Science Center building and two biotech corn traits discussed above.
BC-TID is wholly owned by the local government of Changping District in Beijing and was setup as an industrial investment platform. With over RMB10 billion asset, BC-TID mainly invests in the companies in the industrial parks of Changping District, where Origin Life Science Center building is located.
About Origin Agritech Limited
Origin Agritech Limited, founded in 1997 and headquartered in Zhong-Guan-Cun (ZGC) Life Science Park in Beijing, is China's leading agricultural technology and a rural social e-commerce company, expanding in mid-2018 from crop seed breeding and genetic improvement business to be a leading technology developer in new rural e-commerce platform and Blockchain technologies. In 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. For further information, please visit the Company's website at: http://www.originseed.com.cn or http://www.originseed.com.cn/en/.
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SOURCE Origin Agritech Limited