Hongta Group to sell its stake in Yunnan Baiyao

Aug. 17, 2009 (China Knowledge) - Hongta Group, a leading tobacco firm in China, on Aug. 14 announced that it plans to withdraw from its investment in pharmaceuticals producer Yunnan Baiyao Group Co Ltd<000538> by selling a 12.32% stake equivalent to 65.81 million shares, sources reported.

In 1999, Hongta began to invest in Yunnan Baiyao by purchasing 19 million shares for RMB 68.59 million or RMB 3.61 per share, obtaining a 16.95% stake. During the period from 1999 to 2008, Hongta was a major shareholder in Yunnan Baiyao and realized more than RMB 300 million in returns on its investment in the pharmaceutical firm. 

Yi Pinyao, general manager of Yunnan Baiyao, said that Hongta intends to scale back on non-core businesses and to increase investment in the tobacco sector.

Hongta invests in companies in several fields and is currently a shareholder of Bank of Communications<601328><3328>, Hua Xia Bank Co Ltd<600015>, Kunming World Horti-Expo Garden Co Ltd<002059> and Kunming Pharmaceutical Corp<600422>.