GLG Life Tech Corporation Announces Agreement To Transfer Runde Subsidiary and Erase Nearly CAD $79 Million in Debt

VANCOUVER, BC / ACCESSWIRE / February 20, 2024 / GLG Life Tech Corporation (TSX:GLG) ("GLG" or the "Company"), a global and agricultural leader in the natural zero-calorie sweetener industry, committed to the sustainable development of high-quality zero-calorie natural sweeteners, is pleased to announce that it has signed an agreement, which, once fully approved, will result in the transfer of its Qingdao Runde Biotechnology Company, Ltd. ("Runde") production facility to Fengyang Xiaogang Hongzhang Health Industrial Park Co. Ltd ("Xiaogang"). This transfer, contingent on necessary shareholder and regulatory approvals, is expected to eliminate nearly CAD $79M in bank debt from GLG's balance sheet.

The agreement - part of a multi-year effort to bring about major improvements to the Company's balance sheet - was signed on January 26, 2024. Under the terms of the agreement, for the sale price of one Chinese RMB, one hundred percent of the equity in Runde, currently held by the Company's Anhui Runhai Biotechnology Joint Stock Company, Ltd. ("Runhai") subsidiary, will be transferred to Xiaogang. Xiaogang will thereafter own Runde's tangible assets and will have sole liability for Runde's bank debts. The Company will retain its intellectual property rights, including its proprietary technology and know-how in agriculture and natural sweetener production.

Under supplemental agreements expected to be signed by Runhai and Xiaogang in the coming weeks, Xiaogang will utilize Runde for the benefit of GLG and GLG's customers. Xiaogang will partner with Qingdao Honghongyuan Health Industry Technology Co., Ltd. ("HHY") - the operating entity previously formed to manage Runde's production operations - such that Runde's production continues unchanged under HHY's processes and management. Xiaogang, via HHY, will produce goods at Runde exclusively for GLG, except for domestic China sales. In this manner, GLG's customers can rely on the same production expertise, processes, and highest quality standards remaining in place after this asset transfer becomes fully effective.

The bank debt currently held by Runde constitutes approximately 65% of the Company's bank debt. Thus, this agreement, arising out of extended negotiations with several parties, is expected to eliminate the majority of the Company's bank debt. Combined with the expected disposition, through a Chinese court-ordered bankruptcy proceeding concerning another of the Company's subsidiaries, Dongtai Runyang Stevia High Tech Co., Ltd. ("Runyang"), of Runyang's long-idle facility, the Company expects to erase approximately CAD $110M of the Company's approximately CAD $123M million in bank debt - thus, nearly 90% of the Company's bank debt (including principal and interest) is expected to be erased from the Company's balance sheet.