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BEIJING - Sinovac Biotech Ltd.’s (NASDAQ:SVA) board of directors announced Friday that its Special Meeting of Shareholders was validly adjourned on July 8 until courts resolve a dispute over the validity of certain shares. The company, currently valued at $38.42 million, has seen its shares decline nearly 29% over the past six months, according to InvestingPro data.
The company stated that Chairman Chiang Li adjourned the meeting due to pending litigation in Antigua regarding shares issued through a private investment in public equity (PIPE) to Advantech/Prime and Vivo Capital, collectively known as the Dissenting Investor Group. This corporate governance challenge comes as InvestingPro analysis shows the company’s overall financial health score as WEAK, with particularly concerning metrics in profitability and cash flow.
According to the announcement, SAIF Partners and the Dissenting Investor Group held what Sinovac’s current board describes as an "invalid" meeting after the adjournment. The company maintains that the current board, consisting of Dr. Chiang Li, Mr. Yuk Lam Lo, Mr. Sven Borho, and Mr. Geoffrey Hsu, remains the only legitimate governing body.
The dispute centers on an injunction granted by the Eastern Caribbean Supreme Court of Antigua and Barbuda on July 7, which prohibited the PIPE shares from voting at the meeting. While the Eastern Caribbean Court of Appeal temporarily stayed the injunction, the matter remains unresolved pending further court hearings.
Sinovac’s board stated it will reconvene the Special Meeting once the courts make a final determination on the share validity issue. Meanwhile, the company continues to implement its previously announced dividend policy, including a special cash dividend of $55.00 per common share that began distribution on July 7. Analyst price targets for the stock range from $0.44 to $4.39, reflecting significant uncertainty about the company’s future prospects.
The board also indicated it is working with NASDAQ to resume trading of its shares and is exploring a potential future listing on the Hong Kong Stock Exchange.
Sinovac Biotech is a China-based biopharmaceutical company focused on the development, manufacturing, and commercialization of vaccines, including its CoronaVac COVID-19 vaccine. The company reported a negative EBITDA of $15 million in the last twelve months, with its stock currently trading at $0.12, near its 52-week low of $0.11. Get deeper insights into Sinovac’s financial metrics and exclusive analysis with InvestingPro.
This article is based on a press release statement from Sinovac Biotech Ltd.
In other recent news, Sinovac Biotech Ltd. has been actively involved in several significant developments. The company has commenced the payment of a special cash dividend of $55 per share to shareholders, with distribution methods varying between checks and wire transfers. Additionally, Sinovac announced plans for further dividends, including a $19 per share cash dividend, with the possibility of an extra $3.73 per share contingent on legal outcomes concerning PIPE shares. The company is also embroiled in a governance dispute, with its current board urging shareholders to reject proposals from a dissenting investor group aiming to reconstitute the board. This dispute has led to the adjournment of a special shareholder meeting pending a court decision on the validity of certain shares. Meanwhile, Vivo Capital, an 8% shareholder, has contested Sinovac’s governance and dividend plans, clarifying its support for fair dividends and denying control over the board. Vivo also expressed concerns over recent board actions, including the resignation of Sinovac’s independent auditor and delayed SEC filings. Sinovac’s stock trading remains halted since 2019, with ongoing efforts to resume trading and explore potential listings on the Hong Kong Stock Exchange.
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