Nanjing Xinjiekou halts plan to buy remaining Cordlife shares

The company is under investigation by the Ministry of Health.

Nanjing Xinjiekou, a substantial shareholder of Cordlife Group Limited, has cancelled its plans to acquire the cord-blood bank’s remaining shares.

In a bourse filing, in its eventh letter to Cordlife, Nanjing Xinjiekou said it is withdrawing from the potential offer due to risks misaligned with its investment criteria and business strategy.

The seventh letter follows the several earlier ones stating Nanjing Xinjiekou was still interested in buying over Cordlife’s share it does not own.

However, Nanjing Xinjiekou said it remains “fully committed to leveraging on its expertise and resources to help the company navigate through its current challenges and rehabilitate the group’s business”.

Cordlife’s Singapore operations remain suspended following the Ministry of Health’s (MOH) directive to stop the collection, testing, processing and storing of new cord blood for up to an additional three months effective 15 June or unless sooner approved by the Director-General of Health.

The MOH’s investigations are ongoing with no certainty on the outcome or when Cordlife’s suspension will be lifted.

Additionally, the Association of the Advancement of Blood & Biotherapies informed Cordlife on 15 August that it has withdrawn the company’s AABB accreditation for cord blood activities. 

The association can accredit the company only after the MOH permits business resumption, the company resolves all issues, and several months of records are available for onsite inspection.

“The ongoing investigations by MOH, along with the fixed costs being incurred during the suspension of the Singapore operations of the company and its subsidiaries are expected to continue to have a negative financial impact on the Group's Singapore operations, which had been the Group's largest revenue contributor,” its filing said.

Cordlife recently recorded a net loss of $12.4m in the first half of the year compared to its corresponding period’s profit of $2.2m in 2023.