Aspen Pharmacare, a multinational South African holding company for pharmaceutical concerns, and the largest drug company in Africa, said it might sell a portfolio of products mainly sold in Australia and New Zealand for 1.9 billion rand.
The pharmaceutical company entered into a distribution arrangement with US-headquartered pharmaceutical group Mylan for the portfolio of prescription and over-the-counter products. This initiative was in line with the company’s plan to divest noncore assets.
From March 2019, Mylan would have the option to buy the portfolio for about $188 million Australian dollars. The portfolio generated sales of $55 million Australian dollars in the year to end-June, or about 1.3 percent of Aspen’s total revenues of 42.6 billion rand.
Aspen also said it has “discontinued or terminated” several third-party licences in Australia. A statement released by the pharmaceutical firm said it “remains on track” to meet its full-year guidance of commercial pharmaceuticals organic revenue growth, using constant exchange rates, of between 1 percent and 4 percent.
This was based on its performance for the five months to end-November.
Aspen said “positive performance from commercial pharma in most emerging markets and in Japan has been offset by weaker performance across Europe and Russia”. The company however noted that “significant progress” has been made towards the disposal of the group’s nutritionals business.
According to Aspen, “currently, each of Aspen’s lenders, the Reserve Bank and Nestlé have consented and/or approved the disposal, insofar as is necessary. It is expected that the outstanding conditions precedent will be fulfilled during the first quarter of the 2019 calendar year”.
In case the deal was not complete by the end of 2018, funders had agreed to a temporary increase in the company’s leverage ratio covenant limit.