GlaxoSmithKline (GSK) Consumer Nigeria Plc has said it plans to cease operations after evaluating the options for moving to a third-party distribution model for its pharmaceutical products.
The company is well-known for its products such as
Augmentin, Neosporin, Panadol, Sensodyne, Advair, Ventolin, Theraflu, among
others.
GSK Nigeria announced the development in a statement sent to
the Nigeria Exchange Limited (NGX) on Thursday and signed by Frederick
Ichekwai, the company secretary.
The company said it is working with its advisers to agree on
next steps and plans to submit a scheme of arrangement to the Securities and
Exchange Commission (SEC), which if approved, will see it return cash to
shareholders except its parent company, GSK UK.
The company, which employs over 290 people, assured that all
necessary legal proceedings would be met as regards employees and shareholders.
‘In our published Q2 results we disclosed that the GSK UK
Group has informed GlaxoSmithKline Consumer Nigeria PLC of its strategic intent
to cease commercialization of its prescription medicines and vaccines in
Nigeria through the GSK local operating companies and transition to a
third-party direct distribution model for its pharmaceutical products,” the
statement reads.
“The Haleon Group has also separately informed the Board of
its intent to terminate its distribution agreement in the coming months and to
appoint a third-party distributor in Nigeria for the supply of its consumer
healthcare products.
“For the above reasons, and having, together with GSK UK,
evaluated various other options, the Board of GlaxoSmithKline Consumer Nigeria
Plc has concluded that there is no alternative but to cease operations.
“Today we are briefing our employees whom we will treat
fairly, respectfully and with care, meeting all applicable legal and
consultation requirements.
“The Board is conscious that shareholders will have many
questions; we have been working assiduously with our professional advisors to
agree on next steps and we will be shortly submitting to the Securities and
Exchange Commission (“SEC”) a draft Scheme of Arrangement which may, if
approved, see shareholders other than GSK UK, receive an accelerated cash
distribution and return of capital.
“The Board acknowledges the support of the GSK Group in its
intentions to make this possible, full details of which we hope to publish
shortly. In the meantime, however, we cannot give you assurance of the final
terms of any scheme, or that any scheme will be approved by the SEC or by
shareholder.
“Shareholders are advised to seek professional advice and
continue to exercise caution when dealing in the company’s shares until a
further announcement is made.”
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