GlaxoSmithKline
(GSK) Consumer Nigeria Plc made an announcement on Thursday,
revealing its
decision to close down its production line in Nigeria due to challenging
economic conditions. The company stated that after carefully evaluating its
options, it intends to shift to a third-party distribution model for its
pharmaceutical products.
GSK
Nigeria is renowned for its well-known products, such as Augmentin, Neosporin,
Panadol, Sensodyne, Advair, Ventolin, Theraflu, and many others. The news of
the closure was shared through a statement submitted to the Nigeria Exchange
Limited (NGX) on Thursday, signed by Frederick Ichekwai, the company secretary.
The
company is currently working with its advisors to chart the next steps, and it
plans to submit a scheme of arrangement to the Securities and Exchange
Commission (SEC). If approved, this scheme will facilitate the return of cash
to shareholders, except its parent company, GSK UK.
GSK
Consumer Nigeria Plc emphasized that it will fulfill all legal obligations
concerning its employees and shareholders throughout this process. The company
recently disclosed in its Q2 results that GSK UK Group intends to discontinue
commercializing prescription medicines and vaccines in Nigeria through GSK’s
local operating companies. Instead, they plan to adopt a third-party direct
distribution model for pharmaceutical products. Additionally, the Haleon Group
also informed the Board of its intention to terminate the distribution
agreement and appoint a third-party distributor for consumer healthcare
products in Nigeria.
Considering
the above developments and after carefully exploring various alternatives, the
Board of GlaxoSmithKline Consumer Nigeria Plc has concluded that ceasing
operations is the only viable option.
The
company is currently in the process of informing its employees about the
situation, and it assures them that they will be treated fairly, respectfully,
and with care, complying with all relevant legal and consultation requirements.
The
Board acknowledges that shareholders will have numerous questions, and they
have been working diligently with professional advisors to determine the next
course of action. In the near future, they plan to submit a draft Scheme of
Arrangement to the Securities and Exchange Commission (“SEC”), which,
if approved, may allow shareholders (other than GSK UK) to receive an
accelerated cash distribution and capital return.
However,
the final terms of any scheme and its approval by the SEC and shareholders cannot
be guaranteed at this stage. Shareholders are advised to seek professional
advice and exercise caution when dealing with the company’s shares until
further announcements are made. The Board appreciates the support of the GSK
Group in making these plans possible, and further details will be published in
due course.
