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<Research>M Stanley: CRM Biz Overhaul Helps MICROPORT Achieve Financial Goals
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MICROPORT (00853.HK) is restructuring its CRM business, with its subsidiary CARDIOFLOW-B (02160.HK) issuing new shares to acquire Cardiac Rhythm Management (CRM), involving USD680 million.

According to a Morgan Stanley report, upon completion of the transaction, MICROPORT's stake in CARDIOFLOW-B will decrease from 46.12% to 44.45%, but CARDIOFLOW-B will continue to be its consolidated subsidiary.

In addition, CRM has refinanced through banks to redeem USD128 million of senior convertible bonds by September 2025, significantly reducing the interest rate to 2.8%, further lowering MICROPORT's financial expenses.

Morgan Stanley saw this as an important cleanup event for MICROPORT, as it would address CRM's capital redemption obligations in July and October 2025 at a reasonable valuation. The transaction will also support MICROPORT's goal to reduce its debt ratio from the current 70% to around 50% within 1-3 years, and further to 30-35% within 3-5 years.

MICROPORT's target price was set at HKD16, with a rating of Equalweight.
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