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Overview

Bank of China (Zhejiang Branch) contributes to a €113 million EUR loan to Zhejiang Xianju Pharmaceutical to facilitate its acquisition of a 100% stake in Newchem S.p.A. and Effchem S.R.L

Commitments (Constant USD, 2023)$67,801,069
Commitment Year•2017Country of Activity•ItalyDirect Recipient Country of Incorporation•China (People's Republic of)Sector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Oct 31, 2017
Start (actual)
Nov 14, 2017
End (actual)
Nov 14, 2017

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% Chinese ownership

Funding agencies

State-owned Commercial Banks

  • Bank of China (BOC)

Receiving agencies

Private Sector

  • Zhejiang Xianju Pharmaceutical Co., Ltd.

Loan description

Bank of China branch contributions to a €113 million EUR loan to Zhejiang Xianju Pharmaceutical to facilitate its acquisition of a 100% stake in Newchem S.p.A. and Effchem S.R.L

Interest type•Unknown

Narrative

Full Description

Project narrative

On October 31, 2017, a syndicate of banks — led by the Zhejiang Branch of Bank of China (BOC) as lead bank and including the Milan Branch of BOC — issued a €113 million EUR syndicated loan to Zhejiang Xianju Pharmaceutical Co., Ltd. — a China-incorporated manufacturer of steroid hormone drugs and family planning drugs headquartered in Taizhou and listed on the Shenzhen Stock Exchange — to facilitate its acquisition of a 100% stake in Italian pharmaceutical companies Newchem S.p.A. and Effchem S.R.L.. Newchem and Effechem were Milan-based companies working in the pharmaceutical industry. Newchem engaged in the development, manufacture, and sale of active pharmaceutical ingredients (APIs), steroids, lipids, and hormones and research for applications in agriculture and the food, environmental protection, beauty, and physiotherapy industries. Effechem engaged in a variety of sale activities in the pharmaceutical industry, acting at Newchem's commercialization platform. Xianju Pharmaceutical stated that the acquisition would make it more competitive manufacturing APIs and would internationalize the company. This was Xianjun Pharmaceutical's first overseas merger & acquisition. On October 9, 2016, Xianju Pharmaceutical announced that it had signed a memorandum of understanding (MoU) with Fincarl S.p.A. to acquire a 100% stake in both Newchem and Effechem. In June 2017, Xianju Pharmaceutical announced that it signed a deal to acquire Newchem and Effechem for €110 million EUR ($123.07 million USD). Zhejiang Xianju Pharmaceutical would pay Fincarl €109 million EUR and Carletti Speranza €1 million EUR respectively for the stakes. The acquisition was completed on November 14, 2017 via wholly-owned subsidiary Xianju Pharma Italy S.r.l..

Staff comments

1. It is possible the Singapore and Macau Branches of BOC participated in this loan, as BOC sources mention discussions with them. The loan was apparently only syndicated to BOC. For the time being, AidData has captured contributions only from the Zhejiang Branch and Milan Branch. This issue warrants further investigation. 2. The individual contributions from each bank to the syndicated loan are unspecified. For the time being, AidData assumes that each bank provided an equal contribution to the EUR 113 million loan (EUR 56.5 million each).