SINGAPORE - Traditional Chinese medicine retailer Eu Yan Sang International (EYSI) has inked an deal to receive up to US$35 million (S$60.4 million) in funding from HCare Investments Holding, as it widens its footprint in China.
HCare Investments Holding is an investment vehicle managed by CareCapital Advisors, an investment and business consulting firm with expertise in the healthcare industry in China.
The firm will provide an initial capital of US$10 million, said EYSI in a statement on Friday.
To support future business growth, it has also made available a further sum of up to US$25 million, to be used as and when approved by the board at EYSI.
EYSI will also provide matching funding of US$1 million in the initial stage and further capital of up to US$2.5 million.
The deal will allow EYSI to "expand Eu Yan Sang's brand reputation and heritage and build up a scalable traditional Chinese medicine business in China", said the group.
Under the agreement, HCare will subscribe for new shares issued by Eu Yan Sang China Holdings (EYSCH), a newly incorporated company which will hold the entire issued share capital of Eu Yan Sang (China Venture) and Eu Yan Sang Trading (Guangdong) Co.
This transaction will be consummated after satisfying certain conditions, including the entry into licensing and supply agreements.
EYSCH, set to be the exclusive platform of the Eu Yan Sang brand in China, will conduct product research and development, manufacturing, distribution and retailing of traditional Chinese medicine-related products.
Mr Robert Eu, chairman of EYSI, and Mr Dai Feng, managing director of HCare, will serve as co-chairmen of EYSCH.
The cooperation is expected to fast-track the growth of EYSI business in China, which contributed 1 per cent in revenue to the group's 2015 financials, said EYSI.