Kangmei Pharmaceutical debt acquired by related party

Kangmei Pharmaceutical announced that its related party, Guangzhou Pharmaceutical Group (GPG), acquired a CNY 49,391,100 debt owed by Kangmei through a public auction for CNY 43,500,000. The debt was secured by a guarantee from Kangmei's subsidiary, Chengdu Kangmei Pharmaceutical. GPG will now be the new creditor and guarantor of Chengdu Kangmei. Kangmei Pharmaceutical believes this transaction will help resolve historical debt issues, safeguard its subsidiary's operations, and improve asset allocation. The company advised investors to be aware of the risk of the transaction being cancelled if the related party fails to pay the balance on time.