The Board of Directors of GlaxoSmithKline Consumer Nigeria Plc (NGX: GLAXO) has notified its shareholders, stakeholders and investing public that the company would cease operations in the country.
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In a notification signed by Frederick Ichekwal, the Company Secretary, GLAXO stated that the reasons for the conclusion had to do with the decisions taken by GSK UK Group.
In its published Q2 2023 financial results, GSK disclosed the decisions taken by GSK Group Plc, and for which the decision to cease operations;
- The GSK Group has informed GlaxoSmithKline Consumer Nigeria plc of its strategic intent to cease commercialization of its prescription medicines and vaccines in Nigeria through local operating Companies and transition to a local third-party direct distribution model for GSK products.
- The Haleon Group has informed GlaxoSmithKline Consumer Nigeria plc of its intent to cease its distribution agreement with them in the coming months and to appoint a local third-party distributor in Nigeria for the supply of its consumer healthcare products.
Haleon Group, GSK’s consumer health division was spun out last year, it manufactures products such as Panadol painkillers and Sensodyne toothpaste.
GSK UK did not specify the reason for the move, but in June, it said that widespread foreign exchange shortages in Nigeria were negatively impacting its operations.
“The challenge in accessing currency is affecting our ability to maintain consistent supply of medicines and vaccines in the market,” a spokesperson said at the time.
There has also been signals from the Group that it was under pressure to secure much-needed foreign currency which multinationals need to enable them repatriate revenue earned in the country.
The Board stated that employees of GSK Consumer Nigeria Plc were briefed on Thursday, and added that the employees will be treated “fairly, respectfully and with care, meeting all applicable legal and consultation requirements.”
It went further to state that “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 acknowledged the support of the GSK Group in its intentions to make this possible, full details of which they are expecting to publish shortly.
In the meantime, however, the Board stated that it cannot give assurances of the final terms of any
scheme, or that any scheme will be approved by the SEC or by shareholders.
Shareholders were advised to seek professional advice and continue to exercise caution when dealing in the company’s shares until a further announcement is made.
GlaxoSmithKline Consumer Nigeria Plc is a public limited liability company incorporated in 1971 and domiciled in Nigeria where its shares are publicly traded.
46.4% of the shares of the Company are held by Setfirst Limited and Smithkline Beecham Limited (both incorporated in the United Kingdom); and 53.6% by Nigerian shareholders.
The ultimate parent and ultimate controlling party is GlaxoSmithKline Plc, United Kingdom (GSK Plc UK). GSK Plc UK controls the Company through Setfirst Limited and Smithkline Beecham Limited.
The principal activities of the Company and its subsidiary are marketing and distribution of consumer healthcare and pharmaceutical products.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur