Business & Economy News

GSK Group Cease to Operate, Cite Forex Challenges

GSK UK Group has announced that it is winding down operations in Nigeria due to the company’s inability to access forex in the country.

In an official statement signed by the Company Secretary Frederick Ichekwai, which was sent to the Nigeria Exchange Limited (NGX), the company informed GlaxoSmithKline Consumer Nigeria PLC of its strategic intent to cease commercialization of its prescription medicines and vaccines in Nigeria.

In a statement sent to Nigeria Exchange Limited on 3rd August 2023, the company emphasized that all necessary legal proceedings would be met as regards employees and shareholders.

“Today we are briefing our employees whom we will treat fairly, respectfully and with care, meeting all applicable legal and consultation requirements,” the company said.
“The Board is conscious that shareholders will have many questions; we have been working assiduously with our professional advisors to agree on next steps and we will be shortly submitting to the Securities and Exchange Commission (“SEC”) a draft Scheme of Arrangement which may, if approved, see shareholders other than GSK UK, receive an accelerated cash distribution and return of capital.”

Per its unaudited financial statement for HY 2023, the company has revealed plans to engage a local third-party distributor in Nigeria for the distribution of its consumer healthcare products. The Board expresses gratitude for the support of the GSK Group in this endeavor, and we aim to share comprehensive details in the near future.

“However, it’s important to note that we cannot guarantee the ultimate terms of the scheme or its approval by the SEC or shareholders at this time.
“Shareholders are advised to seek professional advice and continue to exercise caution when dealing in the company’s shares until a further announcement is made,” the company said.

GSK has become the latest victim of Nigeria’s forex crisis, which the government has tried to solve by deregulating the FX market. Shareholders, in an effort to save the company, had called for the intervention of the board and the federal government.

“I fear that there is a rumor going on that GSK is closing down our production manufacturing here (in Nigeria) and then transmitting it to a Distributor and that we would only be importing the drugs into this country.

“We have read what happened in Kenya and we are worried. GSK Nigeria has been a good citizen and a good neighbor and we are all together as shareholders, we have been part of it,” Moses Igbrude, national coordinator, of the Independent Shareholders Association of Nigeria (ISAN) was quoted as saying.

Lamenting about the impact of the FX challenge on the availability of drugs in Nigeria, GSK noted earlier that it’s trying to “limit the period of time the market will be out-of-stock on our products” as it was a priority for patients to get access to their medicines and vaccines.

However, efforts by the company, including engaging with all stakeholders to find a solution to enable a sustainable supply of GSK medicines and vaccines to patients in Nigeria, failed. The development is expected to result in another wave of job losses.

See the full statement below…

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