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news.Alliance Pharma's subsidiary Alliance Pharmaceuticals has agreed to sell its 60% interest in non-core Unigreg to its joint venture partner Pacific Glory Development for a consideration of £2.9m.
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Unigreg owns the rights to Forceval, a micro-nutrient supplement used in pregnancy, in China and some nearby territories. Alliance will continue to market the Forceval brand in the UK.
Through the Unigreg joint venture, Alliance has had an economic interest in China since 2007 and it remains a key territory for the Group. Last year, Alliance established its own affiliate in Shanghai to market a range of child nutraceutical products sold in China and to maintain close links to the Shanghai-based distributor of Kelo-cote™ in China, the product's largest market.
The consideration of £2.9 million for the Unigreg shareholding is being settled in cash with an initial payment of £2.4 million at completion and a deferred payment of £0.5 million due on or before 16 April 2019.
In addition, all outstanding shareholder loans made by the Group to Unigreg, totalling £1.5 million, will be repaid in full prior to, and as a condition of, completion. These initial cash receipts, totalling £3.9m, will be used by the Group to reduce its current bank debt. Completion is expected to take place on Wednesday 18 April 2018.
As at 31 December 2017, the Group's investment in Unigreg was £1.2 million, representing an initial investment of £0.5 million, made in 2007, together with its share of unremitted profits of £0.7 million.
The profit on disposal, approximately £1.5 million (net of fees), will be disclosed as a non-underlying item in the Group's accounts for the financial year ending 31 December 2018. In 2017, the Group's share of profit from Unigreg was £0.2 million.
Source: Company Press Release