UAE’s Gulf Pharmaceuticals (Julphar), which had earlier accumulated losses, is looking to raise 500 million UAE dirhams ($136 million) via a rights issue, it said on Monday.
The proceeds of the cash call will be used to finance the company’s “ambitious turnaround plan” and expand its operations in Saudi Arabia, Iraq and Egypt, among other key markets.
One of the biggest drug manufacturers in the Middle East and Africa, Julphar, reported in May that it managed to trim down its losses for the first three months of the year by 30 percent to 62.5 million UAE dirhams, compared to 891.1 million dirhams a year earlier.
In a statement on Tuesday, Julphar said the rights issue is set to improve its capital position and debt profile.
The new shares, offered at a nominal value of 1 dirham, are available to existing shareholders, with the subscription period starting on June 20 and closing on July 12, 2020.
“The new shares will provide investors with the same rights - including the right to receive all future dividends - as existing shares,” Julphar said.
According to Shaikh Saqer Humaid Al Qasimi, chairman of the board at Julphar, the rights issue is a “key component” of the company’s transformation plan.
“In the past few months, we have accelerated our transformation journey to reclaim Julphar’s leadership position in the MENA region. The 500 million dirham rights issue is central to our turnaround strategy, which capitalists on Julphar’s core competencies to strengthen our balance sheet and invest in sustainable growth opportunities,” said Dr. Essam Farouk, chief executive officer of Julphar.
This year, the company unveiled the relaunch of more than 80 products in Saudi Arabia and Oman.
The two countries, along with Kuwait and Bahrain, had earlier temporarily banned the sale of Julphar’s drugs in 2018, causing the manufacturer to incur some losses.
The company said that Saudi, Bahrain and Oman have already lifted the suspension, while Kuwait is expected to follow suit.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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