NEW YORK, NY- China Aoxing Pharmaceutical Company, Inc. (OTCBB: CAXG) ("China Aoxing"), a pharmaceutical company specializing in research, development, manufacturing and marketing of narcotic and pain-management products, today announced that it has entered into a definitive agreement to sell its non-core land property at 33 million RMB, or approximately $4.8 million, in cash. The sale is expected to close, subject to regulatory review, by June 15, 2009. China Aoxing will use proceeds from the sale for general corporate purposes.
"Divesting the non-core land property is an important milestone in our strategy to focus on core pharmaceutical business and to strength our balance sheet by rationalizing non-essential assets through a non-dilutive transaction to our shareholders. This sale was carefully considered by the Board of Directors and based on a number of business reasons," said Juan Yue Han, Chairman and the CEO of China Aoxing, "A sharper strategic focus can facilitate business growth and potential for achieving further operating efficiencies, accelerating our timeline to profitability."
Under the terms of the divestiture agreement, the land property to be divested occupies 18,350 square meters (or 197,518 square foot, or 4.53 acres) located at the manufacuring facility of Shijazhuang Lerentang Pharmaceutical Company, Ltd. ("LRT"), an operational subsidiary of China Aoxing. The property becomes no longer essential to Company operations as LRT business is fully integrated into Hebei Aoxing. The transaction was conducted in a publicized auction at Shijiazhuang City and the property was sold to the highest joint bidders from Hebei Xinxing Geli Electronics Marketing Company Ltd and Shijiazhuang City Xinyang Weiye Property Company, Ltd., PRC companies.
This transaction is not associated with the land property of Hebei Aoxing, the main campus of China Aoxing, which occupies 200,000 square meters (or 49 acres) and is sufficient to support its business expansion in foreseeable future.
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