Comvita sells stake to strategic Asian partners

Thursday 7th October 2010

Medical honey products developer Comvita has sold a 3.5% stake in the company for $2 million to its Asian partners as part of a strategic alliance in the region.

GPE, the master agent in China, and Aju Pharm, a distribution partner in South Korea, bought 500,000 shares each at $2 per share by way of a private placement - a 5% premium on today’s share price of $1.90.

“This strategic investment by GPE and Aju Pharm cements the relationship between the companies in a very meaningful way and ensures an alignment of our joint longer term interests in developing Comvita’s business in these two key markets,” said chairman Neil Craig.

“It also gives us the confidence to continue expanding our presence in the Chinese and Korean markets through greater investment in direct retail and other supporting infrastructure.”

Yesterday the company turned net loss was $2.2 million for the six months to September 30, as legal costs relating to a patent infringement case in the UK, weaker sales and changes to New Zealand tax laws ate into the company’s profitability. Still, the company said sales prospects for rest of the year look positive, with strong growth in the key markets of China and Hong Kong.

GPE runs a network of more than 300 Comvita retail stores and store-within-stores in more than 30 cities across mainland China, and has been growing a secondary distribution network in premium food retailers and department stores.

Aju Pharm is a second generation family owned pharmaceutical business that runs a network covering more than 1,000 pharmacy stores in South Korea.

Comvita shares were last trading at $1.90, unchanged from yesterday, and have climbed 39% so far this year.

Businesswire.co.nz

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