The drug is in the trap of GNC.

Pharmaceutical Network July 1st, a bad overseas investment, so that the troubled drug once again into the vortex of public opinion.On June 24, GNC filed for bankruptcy protection in the U.SBankruptcy Court in Delaware, and plans to restructure through Chapter 11 of the U.SBankruptcy CodeWhether this old health care products manufacturer can recover from the re-emergence of the old health care products is related to the shares of Harpharma (600664SH) more than 2 billion yuan of investment whether waterdrift.Two years ago, The Company spent $299.5 million on about 300,000 convertible preferred shares issued by GNC, which has not yet been converted into common stockThis time GNC entered into bankruptcy reorganization proceedings, harpharma shares as its preferred shareholders, repayment order is located after ordinary creditors, can not be prioritized liquidation."This does not mean direct liquidation, but rather a self-rescue action that GNC seeks to avoid being liquidated and dissolved." On June 26, senior investment banker Liu Jie (pseudonym) told reporters, "Applying for Chapter 11 bankruptcy protection of the U.SBankruptcy Law, allowingenterprises to
continue to operate under the supervision of the courts, and to formulate restructuring plans and debt-servicing plans, giving stakeholders some flexibility to work together to solve the debt problem." "
reporter noted that the current book loss of GNC investment in the shares of Kazakhstan pharmaceutical shares has been close to 1.2 billion yuanIf GNC restructuring fails, its investment costs and accumulated $171 million in a cumulative dividend of 171 million yuan will not be returned.It is worth noting that, according to the announcement, GNC and most of its existing secured creditors in the run-up to the announcement, another with the controlling shareholder of Harpharma Shares, Harpharma Group, to sell the GNC business as a whole for $760 million to its initial principled intention."The announcement shall prevail in matters relating to GNC investments." On June 26, hapharmaceutical stake related people to the reporter response.However, GNC's filing for bankruptcy reorganization in the United States has not affected its operations in ChinaCompanies outside GNC North America, including GNC's joint venture with Harpharma in China, are not covered by the bankruptcy reorganization proceedings, and Harpharma still owns 65 percent of GNC China, the company said.The back-and-
investment will face huge losses in less than two years, and whether there is any other hidden feeling behind the high-premium bid, which has left Harpharma Group, the controlling shareholder of the company, and Citic Capital in doubtThe pusher behind cross-border investment in GNC is Citic Capital.CITIC Capital is also deeply concerned about kazakhstan, the intersection of the two also from 2004At that time, The first mixed reform of THE group, CITIC Capital, Huaping Investment, Chenneng three companies with more than 2 billion yuan in cash to the hapharmaceutical group capital increase, respectively, the latter 22.5%, 22.5% and 10% of the shares .　　After the first mixed reform of the drug into the rapid development of the "golden five years." In 2005-2010, the main business income of Harpharma shares increased from 8.5 billion yuan to 12.335 billion yuan, and net profit increased from 456 million yuan to 1.13 billion yuan .　　At the peak, the drug quickly went from boom to bust Since 2011, under the pressure of "restriction order", new advertising law, environmental pressure, etc., the main business of Kazakhstan Pharmaceuticals has shrunk, and its performance has declined year after year In the midst of the trouble, Huaping Investment opted out of the 22.5 per cent stake in The PharmaceuticalGroup and sold its stake in the group to Citic Capital in 2017 Citic Capital is clearly not willing to quit, but is trying to seek a controlling stake in the group .　　In September 2019, the second round of mixed reform was completed, and CITIC Capital shared the share of The State Administration of Harbin with a 38.25 percent stake Although the ambition to take control of the group failed to do so, Citic Capital's CEO Zhang Wei took up the position of chairman of The Pharmaceutical Group .　　In fact, before the second round of the merger was approved, CITIC Capital was impatient to dominate the cross-border merger sands of more than $2 billion .　　In July 2017, GNC launched a bid for the sale of its Business in China, and CITIC Capital participated in the bidding on behalf of the Harp Group In August and December of that year, CITIC Capital submitted the first and second rounds of tenders to GNC under the verbal authorization of THE GROUP In February 2018, CITIC Capital signed an investment agreement with GNC on behalf of Harpharma Group .　　At first, Ha Pharma Group and CITIC Capital planned to take the subsidiary of Harpharma shares of People Tongtai (600829 SH) as the subject of the transaction However, after nearly five months of suspension of trading by the two listed companies, Ha Pharma Group and CITIC Capital suddenly changed their minds to change the main body of the transaction from the people to the shares of Ha Pharmaceuticals, on the grounds that the people and Tai "are not expected to be able to raise sufficient scale of funds in a short period of time to meet the needs of the trading process" .　　To this end, the SSE has given the Company and CITIC Capital a briefing of criticism on the grounds that "the promotion work is not prudent" .　　High-premium mergers and acquisitions had wanted to swallow GNC in one go .　　In the early stage of negotiations with GNC, the original plan was to take the people with Thailand as the main trading body, through direct capital increase or cash subscription preferred shares, convertible bonds and other means, to invest in GNC and take control of it, the acquisition capital is expected to be 4 billion - 5 billion yuan However, the two sides failed to agree on the terms of control The final outcome of the negotiations, the scope of the transaction only includes the subscription of GNC preferred shares .　　The final deal is to buy the convertible preferred shares issued by GNC in cash, with an annualized dividend yield of 6.5% and a conversion price of $5.35 per share, with the company as the main investor At any time, the preferred shares can be converted into common stock, and upon completion of the conversion, it is expected to acquire a 40.1% stake in GNC, making it its single largest shareholder At the same time, the number of directors of GNC has increased to 11, and the company has the right to nominate five directors .　　Judging from the details of the disclosed transactions, Citic Capital's team has become an important bargaining chip in the final stage of negotiations with GNC .　　As of 2018, GNC has about 8,800 retail entities in more than 50 countries and regions around the world, providing more than 1,500 health products GNC's performance has declined sharply since 2015, hit by factors such as saturation in the North American market and e-commerce .　　By the time the drug was in place, GNC was already in a loss and insolvent At the end of 2017, GNC had total assets of $1.516 billion, while its total liabilities were $1.679 billion, with an asset-liability ratio of 110 percent, the data showed .　　"Mainly in the GNC brand and imports health care products in the Chinese market potential." On June 27, a close to the pharmaceutical industry told reporters, "In addition to the raw materials, the preparations sold by the drug are mostly generic drugs and OTC varieties, squeezed by the policy and weak competitiveness." Companies in the past to marketing, in the research and development resources do not have much accumulation, independent development is not realistic, spend money from the outside to introduce varieties faster "
GNC's operations continue to deteriorate As of May 6, 2020, 1,300 GNC stores in the U.S and Canada were temporarily closed due to government requests, and some of them are likely to close permanently in the future .　　AT THE END OF THE FIRST QUARTER OF THIS YEAR, GNC'S TOTAL LIABILITIES WERE $1.607 BILLION AND ITS NET ASSETS WERE $191 MILLION .　　The company or the company the bankruptcy protection, GNC will be restructured through an independent restructuring plan and a sale plan, both of which will proceed in the same direction, and GNC is expected to finally confirm the adoption of one of them with a view to completing the restructuring process this fall .　　In the independent restructuring plan, GNC has signed a Restructuring Support Agreement with more than 92% of fixed-term lenders and 87% of asset pledge lenders and has agreed on an independent restructuring plan .　　It is worth noting that in the sale plan, GNC and most of its existing secured creditors met with the Group for a further $760 million in the sale of GNC business as a whole in the run-up to the announcement In addition, GNC is working with IVC (GNC's largest supplier) to ensure the continued availability of products and facilitate the proposed sale .　　As of June 29, however, GNC's share price had fallen to $0.617 a share, wiping $52.19 million At this time, the drug is intended to be valued at $760 million to take over, hit what is the abacus? .　　Despite having 40.1 per cent of the potential shares and five board seats, Mr Ha's control of GNC has not been achieved "Although it can be converted to common stock at any time, GNC's share price has been plummeting When the share price is too low, it is not usually chosen to convert to common stock In Liu Jie's view, the drug is still "obsessed" with taking control of GNC .　　At present, in addition to fixed dividend income, the cooperation between HaPharma and GNC is mainly the right to Chinese mainland .　　In November 2018, HaPharma invested US$20 million in a joint venture with GNC in Hong Kong and Shanghai, with HA Pharmaceuticals accounting for 65% of the shares and GNC 35% The joint venture has exclusive rights to Chinese mainland GNC business Specifically, GNC supplies the joint venture at a price equivalent to that of its u.S and Canadian-owned stores, and GNC authorizes the joint venture's long-term exclusive trademark license to produce and sell GNC products exclusively in Chinese mainland .　　Reporters note that the current GNC in China is not many, only in Shanghai opened five offline stores The joint venture mainly imports the brand's health products from GNC
and sells it in China in the form of cross-border e-commerce, with most of the revenue coming from tmall, JD.com and other online platforms .　　According to GNC China CEO Huang Xiangxuan revealed that this year, despite the impact of the outbreak, GNC China's first-half sales compared with the same period last year is still more than 50%, the same period comparable profit growth of more than 100% .