Trading in the stock of Global Cord Blood Corporation (GCBC) has been halted on the Novel York Stock Exchange since September 23, 2022, following the appointment of provisional liquidators by the Grand Court of the Cayman Islands.
The liquidation proceedings were initiated after a petition filed by Blue Ocean Structure Investment Company Limited, a shareholder of GCBC, on August 22, 2022. Margot MacInnis and John Royle of Grant Thornton Specialist Services (Cayman) Limited, along with Chow Tsz Nga Georgia of Grant Thornton Recovery & Reorganisation Limited, were appointed as Joint Provisional Liquidators, effectively suspending the powers of the company’s directors.
GCBC, formerly known as China Cord Blood Corp., is considered China’s leading provider of cord blood collection, laboratory testing, hematopoietic stem cell processing, and stem cell storage services. It operates a network of public/private cord blood banks and, as of March 2022, held the world’s largest inventory of stored cord blood units, totaling 1,060,516. The company holds exclusive licenses to operate in the provinces of Beijing (since 2002), Guangdong (since 2006), and Zhejiang (since 2010), regions that collectively recorded 1.8 million births in 2020.
Despite the financial difficulties leading to liquidation, GCBC reported a cash reserve of over $1 billion USD in its 2022 annual report, a sales force exceeding 700 employees, and relationships with over 400 hospitals. Between 2020 and 2022, the company averaged more than 75,000 new family bank subscribers annually, even during the COVID-19 pandemic. The majority of GCBC’s revenue is derived from annual fees paid by these family bank subscribers.
Beyond its core operations in China, GCBC too holds a 24% stake in the cord blood bank of Shandong province, which saw 0.8 million births in 2021, and a 10% equity stake in Cordlife Group, an Asia-Pacific banking network.
The current situation at GCBC follows a period of success in cord blood banking, but the company remains in “Joint Provisional Liquidation.” The Joint Provisional Liquidators are authorized to protect the company’s assets, defend legal actions, investigate the company’s affairs, engage staff and advisors, collect property, and execute agreements. They filed an initial progress report to the Grand Court within 28 days of their appointment and a further report within 70 days.
Investors have also pursued legal action against Golden Meditech Holdings Ltd., GCBC’s former parent company, alleging participation in a scheme to defraud investors through a failed buyout of a Texas-based biotech firm. The investors claim Golden Meditech knowingly entered into a “sham transaction” involving $664 million in cash consideration intended to conceal previous monetary transfers from Global Cord.
