Dubai: Ras Al Khaimah headquartered Julphar has launched a Dh500 million rights issue, the funds from which will be used for the drug maker's turnaround plans.
It will thus "improve the capital position and debt profile and provide the financial foundation for the successful implementation of the company’s medium-term growth strategy," Julphar said in a statement.
The capital restructuring programme includes a capital reduction of Dh503 million as an initial step. Julphar is offering 500 million new shares with a nominal value of Dh1 to existing shareholders. These shares will provide investors with the same rights - including the right to receive all future dividends - as existing ones.
The subscription period of the shares begins on June 29 and ends on July 12. In April, Julphar was allowed to re-sell its branded medicines in Saudi Arabia for the first time since September 2018. Oman too removed strictures on the company's products being available in that market.
“The rights issue is a key component of the transformation plan which I am confident will further help us fuel our growth agenda in the years to come," said Sheikh Saqer Humaid Al Qasimi, Chairman. "Our business fundamentals are robust and we have the experience, capabilities and resources to unlock further growth potential in our core markets.”
Help with expansion
The new capital would also help expand operations in Saudi Arabia, Iraq and Egypt. Julphar announced the relaunch of over 80 products in Saudi Arabia and Oman after confirmation of full compliance with Good Manufacturing Practices, through an inspection conducted by the Gulf Health Council (GHC) and the Saudi Food and Drug Authority.
According to Dr. Essam Farouk, CEO, “The rights issue is central to our turnaround strategy, which capitalizes on Julphar’s core competencies to strengthen our balance-sheet and invest in sustainable growth opportunities. We are working on several strategic initiatives to move us towards a cash positive position and bring Julphar back to profitability.”
