After 52 Years, Drug Manufacturer GSK Gets Approval to Delist from NGX, Shareholders Get Juicy Offer
- GlaxoSmithKline Consumer Nigeria Plc (GSK) has perfected plans to delist from the Nigerian Exchange Limited (NGX)
- The company said it has received approval from the Securities and Exchange Commission to begin arrangements for the delisting
- It also said its shareholders would receive about N17.42 for every share held in the company
Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
GlaxoSmithKline Consumer Nigeria Plc (GSK) has informed the Nigerian Exchange Limited (NGX), its shareholders, and other stakeholders that the firm has now received formal approval from the Securities and Exchange Commission (SEC) to begin arrangement to delist from the NGX.
GSK also said that the Federal High Court's order sanctioning the Scheme of Arrangement has been received, adding that an application for delisting the company's shares from the NGX will soon be submitted.
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GSK shareholders to receive mouthwatering offers
It stated that all the company's shareholders would receive a total cash distribution of N17.42 per share for every share held.
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According to reports, on December 5, 2023, shareholders proposed a Scheme of Arrangement for the company.
The company notified the NGX on November 2, 2023, that it received the SEC's 'no objection' to propose a Scheme of Arrangement to shareholders to dissolve GSK's business.
On August 3, 2023, the company announced it would cease operations in Nigeria.
Other outstanding shares to be cancelled
The transaction will be implemented by a Scheme of Arrangement between the company and its shareholders following the provisions of Section 715 of the Companies and Allied Matters Act 2020.
Under the terms of the scheme, the shares, being all of GSK's outstanding shares, will be cancelled subsequently.
GSK UK owns about 555,081,925 Ordinary Shares of GSK held by Setfirst Limited and SmithKline Beecham Limited but opted to relinquish their portion of cash distribution.
GSK's exit causes the price of products to skyrocket
GSK's exit from Nigeria rattled the healthcare industry, with the market reacting sharply to the news.
The price of drugs and other essential healthcare products instantly skyrocketed by over 1,000% in Nigeria.
The company announced in August 2023 that it was exiting the Nigerian market after 52 years of operations.
Analysts disclose why GSK and others are leaving Nigeria
Analysts believe that GSK's and other multinational's exit from Nigeria is due to the harsh economic environment, high inflation, and scarcity of Forex.
Business analyst and Editor at the Nigerian Xpress, Emeka Okoroanyanwu, said it would be difficult for any European and US business to thrive in Nigeria because they play by different rules.
"The only people that can play in an environment such as ours are the Asians because they have similar environments and are essentially risk-takers.
"Americans and Europeans have strong ethical laws which bind them even when they're abroad. So, they are mostly opposed to our environment. Besides, who wants to invest in an economy plagued with high inflation, forex scarcity, and lack of ease of business?"
Another international company to stop operation in Nigeria
Legit.ng reported that Sanofi-Aventi Nigeria, a leading French pharmaceutical company, has decided to close its direct operations in Nigeria.
The company wants to adopt a third-party model to distribute its products in Nigeria from 2024.
This was disclosed in a memo addressed to stakeholders and customers in the healthcare industry o titled "Sanofi adopts new business model in Nigeria," signed by the Country Lead, Folake Odediran..
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Source: Legit.ng
