Chinese shareholder halts plan to fully acquire Cordlife as uncertainties persist

SINGAPORE: Nanjing Xinjiekou, a key shareholder in Cordlife Group Limited, has officially withdrawn its intention to acquire the remaining shares of the cord-blood banking company.

The decision was disclosed in a recent filing with the Singapore Exchange, marking the seventh formal communication between Nanjing Xinjiekou and Cordlife on the matter.

The withdrawal was attributed to risks that no longer align with Nanjing Xinjiekou’s investment criteria and broader business strategy.

Despite this setback, the shareholder reaffirmed its commitment to supporting Cordlife’s efforts to overcome current challenges and restore its business operations.

This move comes after multiple prior letters from Nanjing Xinjiekou expressing ongoing interest in acquiring Cordlife’s remaining shares.

However, the recent decision signals a shift in approach, with the focus now shifting towards leveraging expertise and resources to help Cordlife navigate its current difficulties.

Cordlife has been facing significant challenges, particularly in its Singapore operations. The company has been under suspension by the Ministry of Health (MOH), which ordered a halt to the collection, testing, processing, and storage of new cord blood.

This suspension, initially implemented in June, has been extended for up to an additional three months, with no clear timeline for resolution. The MOH’s ongoing investigations have left the company in a state of uncertainty.

In a further blow to Cordlife, the Association of the Advancement of Blood & Biotherapies (AABB) recently revoked the company’s accreditation for cord-blood activities.

The reinstatement of this accreditation is contingent on Cordlife receiving clearance from the MOH, resolving outstanding issues, and demonstrating compliance with operational standards over several months.

The extended suspension and ongoing investigations have had a significant financial impact on Cordlife. The company recently reported a net loss of $12.4 million for the first half of the year, a stark contrast to the $2.2 million profit it posted during the same period in 2023.

The Singapore operations, previously the largest revenue contributor for the group, have been particularly affected. /TISG