Gulf Pharmaceutical Industries, Julphar, announced the launch of its AED500 million rights issue as the company progresses on its ambitious turnaround plan. The rights issue is set to improve the company’s capital position and debt profile and will provide the financial foundation for the successful implementation of the company’s medium-term growth strategy, Julphar said in a statement.
As part of its capital restructuring, which included a capital reduction of AED503 million as an initial step, Julphar offers 500 million new shares with a nominal value of AED1. Issued to existing shareholders, the new shares will 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 29th June 2020+ and ends on 12th July 2020. Commenting on the launch of the rights issue, Sheikh Saqer Humaid Al Qasimi, Chairman of the Board of Julphar, said, “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. On this occasion, I would like to thank our shareholders for their continued trust and their confidence in our ability to strengthen Julphar’s operational and financial performance. Our business fundamentals are robust and we have the experience, capabilities and resources to unlock further growth potential in our core markets.”
The capital restructuring and the terms of the rights issue were approved by Julphar’s Board of Directors and shareholders at the company’s Annual General Assembly held in April 2020. The rights issue has also been approved by the Security and Commodities Authority of the UAE.
Dr. Essam Farouk, CEO of Julphar, commented, “The AED500 million 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 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.”
In addition to improving its capital structure and balance sheet, the newly injected capital is expected to help expand Julphar’s operations in key markets including Saudi Arabia, Iraq and Egypt.
Earlier this year, Julphar announced the relaunch of over 80 products in both Saudi Arabia and Oman after the confirmation of its full compliance with Good Manufacturing Practices through an inspection conducted by the Gulf Health Council and the Saudi Food and Drug Authority.