…records over N7bn loss in six months
Plans are underway by GlaxoSmithKline (GSK) Nigeria to stop doing business after evaluating the options for moving to a third-party distribution model for its drugs and consumer healthcare goods.
In statement on Thursday it said: “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.”
Shares in GSK Nigeria, in which British drug maker, GSK has a 46.4 per cent stake and Nigerian shareholders the remaining 53.6 per cent, closed at N8.10, down from a peak of N42.24 in 2014.
GSK Nigeria, which has faced increased competition from local companies and imports from India and China, said its half-year sales had dropped to N7.75 billion ($9.82 million), from N14.8 billion in the same period a year ago.
Its British parent company, GSK, which has been in Nigeria since 1971, said in 2018 that it would cut back its operations in Africa and adopt a distributor-led model instead of marketing medicines in 29 African markets.
GSK Nigeria said it was working with advisers to agree next steps and plans to submit a scheme of arrangement to Nigeria’s Securities and Exchange Commission, which, if approved, would see it return cash to shareholders except its parent GSK.
It also said the Haleon Group (HLN.L) had informed it of plans to terminate a distribution agreement and to appoint a third-party distributor in Nigeria, which faces a cost of living crisis, rising business costs and a shrinking consumer base.