Ras Al Khaimah pharma company Julphar launches Dhs500m rights issue

Gulf Pharmaceutical Industries (Julphar) has launched a Dhs500m rights issue as part of its turnaround plan, it said on Monday.

Its capital restructuring initiative included an initial capital reduction of Dhs503m. Julphar is now offering 500 million new shares with a nominal value of Dhs1.

The new shares will be offered to existing shareholders and provide investors with the same rights – including the right to receive all future dividends – as existing shares.

The subscription period of the shares begins on June 29, 2020, and ends on July 12, 2020.

The Ras Al Khaimah-headquartered company added in a statement that the rights issue was intended to “improve the company’s capital position and debt profile and provide the financial foundation for the successful implementation of the company’s medium-term growth strategy.”

The new capital is also expected to help it expand operations in key markets including Saudi Arabia, Iraq and Egypt.

“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. Our business fundamentals are robust and we have the experience, capabilities and resources to unlock further growth potential in our core markets,” said Sheikh Saqer Humaid Al Qasimi, chairman of the board of Julphar.

The rights issue was already approved by the board of directors and shareholders in April, and was also approved by the Security and Commodities Authority of the UAE.

“The Dhs500 million rights issue is central to our turnaround strategy, which capitalises on Julphar’s core competencies to strengthen our balance sheet and invest in sustainable growth opportunities, while creating sustainable shareholder value. We are working on several strategic initiatives to move us towards a cash positive position and bring Julphar back to profitability,” said Dr. Essam Farouk, CEO of Julphar.

Essam Farouk was appointed as Julphar’s new CEO in April.

Read: UAE-based pharma Julphar appoints new CEO

He replaced former CEO Jerome Carle, who resigned from the company last year, as it faced mounting troubles after some of its products had to be recalled.

That same month, Julphar said that it has received the approvals to resume exports to Saudi Arabia.

The announcement came after an inspection of Julphar’s manufacturing facilities by the Saudi Food and Drug Authority (SFDA).

Read also: UAE pharma Julphar resumes exports to Saudi after suspension

The kingdom had previously banned Julphar’s products in September 2018 for failing to meet regional standards and the company was working with the SFDA since then to lift the ban.

Julphar subsequently announced the relaunch of over 80 products in both Saudi Arabia and Oman this year after it complied with the necessary regulations.