GlaxoSmithKline shuts down in Nigeria amid economic downturn after over 50 years of operations – Newstrends
Connect with us

Business

GlaxoSmithKline shuts down in Nigeria amid economic downturn after over 50 years of operations

Published

9 months ago

on

GlaxoSmithKline shuts down in Nigeria amid economic downturn after over 50 years of operations

GlaxoSmithKline (GSK) Consumer Nigeria Plc on Thursday disclosed that it will shut down its production line in Nigeria due to unfavourable economic situation.

The company said it plans to stop 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.

READ ALSO:

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.

Advertisement
“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 shareholders.

“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.”

GlaxoSmithKline shuts down in Nigeria amid economic downturn after over 50 years of operations

Related Topics:
Advertisement

Business

Naira drops further to N1,421.06 per dollar

Published

3 mins ago

on

May 9, 2024

By

Naira drops further to N1,421.06 per dollar

The declining fortunes of the Naira persisted yesterday with further depreciation in the parallel and official markets due to the re-emergence of speculation and hoarding, even as some Bureaux De Change, BDCs withdrew from the Central Bank of Nigeria, CBN’s, dollar sales program.

Vanguard also learnt that despite the sustained nationwide raids and arrest of street currency hawkers, the Naira further depreciated yesterday to N1,435 per dollar in the parallel market, from N1,415 per dollar on Tuesday, and also depreciated to N1,421.06 per dollar in the Nigerian Foreign Exchange Market, NAFEM.

Data from FMDQ showed that the indicative exchange rate for NAFEM fell to N1,421.06 per dollar from N1,416.57 per dollar on Tuesday, indicating N4.49 depreciation for the naira.

Consequently, the margin between the parallel market and NAFEM rates widened to N13.94 per dollar from N1.57 per dollar on Tuesday.

Dollar sales to BDCs

In a bid to intervene in the retail segment of the forex market, the CBN in February resumed dollar sales to BDCs. Since then the apex bank has held three editions of the dollar. At the last edition, the CBN offered to sell $10,000 per BDCs at directing them to sell at the maximum margin of 1.5 per cent.

READ ALSO:

BDC operators however complained dollar disbursement from CBN is too slow that and takes three to four weeks between when they make payment and when the dollars are disbursed to them.

Vanguard reliably gathered that as a result of this delay and the uncertainty in the forex market, some BDCs, have asked the CBN to refund their Naira payment.

Top BDC operators who confirmed this development to Vanguard under the condition of anonymity said that some of the BDCs that asked for refunds have gotten their money.

Speaking to Vanguard on condition of anonymity, the Chief Executive of a BDC said, “I think the CBN is overwhelmed. You pay money and it takes one month for you to collect $10,000. It is over a month now since they intervened and they have not intervened again.

“Even the last one that they did some BDCs are just collecting the dollars. Some are even saying they should return their money. They are asking for a refund because there are many challenges. Some have paid but their name is appearing in another location which makes it impossible to collect the dollars. Some are getting their refund but it is a very slow pace too.”

Also speaking on condition of anonymity, another BDC operator said, “There is no supply. The CBN supply is slow. They sell one tranche for one month. It is too low. If they don’t have the money they should tell us we don’t have the money.”

Speculation reemerges

Vanguard investigations also revealed the reemergence of speculation and hoarding in the forex market due to the steady depreciation of the Naira in the last three weeks.

Speaking anonymously, a BDC operator said, “You know people are still doubtful. A lot of people now at any opportunity, buy dollars and keep, thinking that the rate will go up again. So speculation and hoarding are still happening.

“Before when people are scared, they bring out their dollars to sell. But now nobody is doing that. Supply is not coming into the market. There is no certainty about the frequency and volume of intervention from CBN. And this further encourages speculation and hoarding.”

Efforts for the CBN to respond to the above developments proved abortive as the Director, of Corporate Communication, CBN, Mrs Hakama Sidi-Ali, did not respond to calls and SMS and WhatsApp messages from Vanguard.

Naira drops further to N1,421.06 per dollar

Continue Reading

Business

Naira trades at N1,415/$ on parallel market

Published

23 hours ago

on

May 8, 2024

By

Naira trades at N1,415/$ on parallel market

The Naira yesterday depreciated to N1,415 per dollar in the parallel market, from N1,410 per dollar on Monday.

Similarly, the Naira depreciated in the Nigerian Foreign Exchange Market, NAFEM, to N1,416.57 per dollar.

READ ALSO:

Data from FMDQ showed that the indicative exchange rate for NAFEM fell to N1,416.57 per dollar from N1,354.21 per dollar on Monday, indicating N62.36 depreciation for the naira.

Consequently, the margin between the parallel market and NAFEM rates narrowed to N1.57 per dollar from N55.79 per dollar on Monday.

Naira trades at N1,415/$ on parallel market

Continue Reading

Business

CBN extends suspension of cash deposit charges by bank customers

Published

23 hours ago

on

May 8, 2024

By

CBN extends suspension of cash deposit charges by bank customers

The Central Bank of Nigeria (CBN) has directed commercial banks to extend suspension of charges on cash deposit until September 30 this year.
This directive was conveyed through a circular dated May 6, signed by Adetona Adedeji, the Director of Banking Supervision at the apex bank.
The banks had reintroduced fees for deposits exceeding N500,000 for individuals and corporate account holders on May 1.

Following the banks’ decision, individuals were set to incur a two per cent charge on deposits exceeding N500,000, while corporate account holders faced the same levy on deposits surpassing N3 million.
The new circular read, “Please refer to our letter dated December 11, 2023, referenced BSD/DIR/PUB/LAB/016/023 on the above subject, suspending processing charges imposed on cash deposits above N500,000 for individuals and N3,000,000 for corporates as contained in the ‘Guide to Charges by Banks, Other Financial Institutions and Non-Bank Financial Institutions’ issued on December 20, 2019.
“The Central Bank of Nigeria hereby extends the suspension of the processing fees of two per cent and three per cent previously charged on all cash deposits above these thresholds until September 30, 2024.”

Continue Reading

Trending

Skip to content