Origin Agritech to cancel second phase of sale of commercial seed business
Origin Agritech announced that the company received the asset sale proceeds of RMB24.14M from the first closing of the asset sale transaction from Beijing Shihui Agricultural Development Co. "The company has reviewed the Second Closing and believes that it is in the best interest of the company, at this time, to cancel the Second Closing. With the cancellation of the Second Closing, the company will continue to own the seed processing plant in Zhengzhou, the distribution business of Beijing Origin and the Beijing headquarters building. The distribution business of Beijing Origin represented over 70% of total corn seed revenue during 2017 planting season. The company believes that the assets to be retained are more valuable to the company at this time partly because they can generate significant cash flow and potentially can result in meaningful earnings for the company. More importantly, the company believes that the potential for the GMO technologies to be commercialized in China has increased recently. If the GMO technologies can be commercialized by 2020, as suggested by an announced plan from the Chinese government, the combined assets of the company's GMO technologies and distribution business could prove of significant value to the shareholders," Origin Agritech stated.