JUNEASIA BUSINESS OUTLOOK9TEMASEK BACKED FIRMS ACQUIRE STAKES IN VIVA BIOTECH AHEAD OF IPOJAPAN'S INFLATION SHOWS EASING, GAS PRICES DECREASENEWSROOMAdeal for 1.06 billion yuan ($148.7 million) for interests in a division of VIVA Biotech Holdings was reached by organisations funded by Singapore's Temasek and China's High Light Capital, the pharmaceutical service provider announced. The agreement comes as the Chinese drug discovery and manufacturing service provider aims to restructure its companies and float the Shanghai company on an onshore stock exchange. It will reduce VIVA Biotech's share in VIVA Shanghai from 100 percent to about 75.79 percent.According to VIVA Biotech, it will redeem convertible notes with the net proceeds in an effort "To settle its outstanding liabilities without occupying its internal resources". As per the filing, the agreement includes the sale of an existing interest in VIVA Shanghai from Viva Investment, another division of VIVA Biotech, as well as the infusion of funds into VIVA Shanghai by new investors. Following the transaction, Temasek-owned True Light Capital GP and Temasek-owned Daxue Investments, a division of Temasek Holdings, would jointly own 17.55 percent of VIVA Shanghai.HLC SPV and Qingdao Hongyi, two entities connected to High Light Capital, will each receive a 6.66 percent stake as a result of the deal. According to the filing, VIVA Biotech has started a restructure that will move all assets and staff associated with its early-stage drug discovery business to VIVA Shanghai and remove all assets and personnel associated with drug development and manufacturing services from the Shanghai subsidiary. Investors in the deal anticipate that VIVA Shanghai's IPO application would be submitted by June 30th, 2024. Japan's wholesale inflation fell for a fifth straight month in May as a result of falling gasoline and commodity prices, a sign that the cost-push pressure that has raised consumer inflation may be abating. The data supports the central bank's prediction that consumer inflation will moderate in the months ahead as global commodity prices decline from their record levels from the previous year. This week, the Bank of Japan (BOJ) is anticipated to retain its ultra-loose monetary policy and stick to its prediction for a mild economic recovery as strong business and household spending offset the impact of sluggish global demand, according to sources.According to BOJ data, the corporate goods price index (CGPI), which tracks the prices businesses charge one another for goods and services, increased 5.1 percent in May compared to the same month last year, which was less than the median market expectation of 5.5 percent. The increase followed a corrected 5.9 percent gain in April and was significantly below the peak of 10.6 percent recorded in December of last year as prices of chemicals, fuel, nonferrous metals, and electricity declined, according to the report.The data showed that the cost constraints on industries close to homes, including restaurants and stores, were still present in May, with the prices of food and beverage products rising 7.9 percent from a year earlier and those of electric equipment up 5.5 percent. As businesses kept raising prices, Japan's core consumer inflation reached 3.4 percent in April. This raises questions about the BOJ's prediction that inflation will gradually fall back below 2 percent in the second half of the current fiscal year, which ends in March 2024.
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