About three weeks after Fuan Pharmaceutical's fluorite mine investment announcemet, Fuan Pharmaceutical terminated this investment project, mainly because of Mr. Huang Hua and Zuoxuan Mining's incomplete performance of the contract.
On Sept. 23, 2013, Fuan Pharmaceutical (Group) Co., Ltd. (Fuan Pharmaceutical) announced that its wholly owned subsidiary-Fuan Pharmaceutical (Group) Qingyutang Pharmaceutical Co., Ltd. (Qingyutang Pharmaceutical) would invest USD19.48 million in Chongqing Zuoxuan Fluorite Mining Co., Ltd. (Zuoxuan Mining). And Fuan Pharmaceutical has signed a joint venture contract and a supplemental agreement with Zuoxuan Mining. (More details can be referred to China Fluoride Materials Monthly Report 1310)
On Oct. 16, 2013, Fuan Pharmaceutical released an announcement to terminate this investment project. According to the announcement, the termination of the cooperation can be mainly attributed to two reasons. Firstly, Mr. Huang Hua (the legal representative of Zuoxuan Mining) was unwilling to provide the information about subsequent information disclosure matters, which was inconsistent with the contract requirements. Secondly, Mr. Huang Hua hasn't gone through the industrial and commercial alteration formalities and put forward to cancel the contract.
After consultation, the joint venture contract and supplemental agreement were canceled. Besides, Fuan Pharmaceutical and Zuoxuan Mining reached the following terms and conditions on relevant matters. Firstly, the original joint venture contract and supplemental agreement will be automatically lapsed after the termination agreement is signed. Secondly, Zuoxuan Mining should help Qingyutang Pharmaceutical to deal with relevant matters about liquidation and refund. Moreover, Zuoxuan Mining will undertake the responsibility for the breach of contract. Thirdly, Zuoxuan Mining will give investment capital's interest (the same as the loan interest rate of bank) as extra compensation to Qingyutang Pharmaecutical before the date of Dec. 31, 2013.
In the announcement, Fuan Pharmaceutical expressed that the termination of fluorite mine investment project won't cause significant impact on its business performance and stockholders' equity, because the investment project ended at the early stage.
It is estimated that Fuan Pharmaceutical will still seek opportunities to invest in medical resources, such as fluorite ore resources, because such investment will help the company integrate upstream industries to reduce the production cost. Besides, Fuan Pharmaceutical is in the product structure adjustment stage and based on the maximization principle of company's profit and shareholders' interest, company will keep taking measures (investment, merger and acquisition) to extend its industry chain and to improve its product structure.
Table of contents of China Fluoride Materials Monthly Report 1311:
Fuan Pharmaceutical terminates the fluorite mine investment project
HNFG's fluorite tailings utilization project developing slowly
A first domestic automatic production line of fluorite ball puts into trial production
FECO releases an announcement about HCFC usage quotas of 2013
Zibo Haihui develops a new production technology of cryolite
Do-Fluoride's business performance to appear a sign of rebound in Q4 2013
Xiangxiang Fluoride's recycling project makes a technical breakthrough
Juhua releases its Q3 report and enters into overhaul period in mid-Oct. 2013
Arkema to increase investment continuously in China
Jiangxi Shilei Fluoro Material to construct a new fluorine chemical project
Jiangsu Jiujiujiu's business performance to rebound gradually in Q4 2013
Import and export analysis of fluoride chemicals in China in Sept. 2013
Domestic ex-works prices of most fluoride materials in Oct. 2013
Shanghai 3F sees a growth of business performance in Q3 2013
Second phase of DuPont China R&D Center puts into operation in Oct. 2013
Honeywell to construct its first wholly-owned production base in China
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