Cipla Limited, a multinational pharmaceutical company, has revealed that it will sell a majority shareholding of 51.18% in its Ugandan subsidiary, Cipla Quality Chemicals.
In a statement to shareholders issued on Wednesday, 15 March 2023, Cipla said it will sell the stake to Africa Capitalworks, an investment management company incorporated in Mauritius.
The statement also reveals that the Cipla Quality Chemical Industries Board of Directors is aware that the company applied to the Capital Markets Authority for approval of the transaction.
Mr Ajay Pal, the chief executive officer of Cipla Quality Chemical Industries Limited, however, said there will be no change in business.
“Cipla Quality Chemicals is still a profitable business, its market is expanding and they begin to manufacture new drugs at the end of the year,” he said in an interview.
“It is an expression of interest by Africa Capital Works SSA 3. This is more of a special transaction, not a takeover of the company. It remains limited to taking ahareholding from Cipla Quality Chemicals, we shall give more details once Capital Markets Authority and Uganda Securities Exchange approve the sale of shares,” he added
The sale is expected to generate about $30 million, the same amount that Cipla spent on acquiring the 51% in QCL in 2015.
If the transaction is approved, Africa Capitalworks will become the largest shareholder in Quality Chemicals Industries (QCIL).
However, one of the terms in the agreement is that QCIL will continue to manufacture, distribute and sell products of Cipla Group.
The company’s current shareholders include Meditab Holdings Ltd (51.05 percent) and AMISTAD (11.51 percent).
Other shareholders are Capitalworks SSA 1 (11.15 percent), government employees pension fund (8.54 percent), NSSF Uganda (7.38 percent, Cipla (EU) (0.13 percent) and Yiga Joseph (0.11 percent).
The Ugandan founders of Cipla; Emmanuel Katongole, Ferderick Kitaka Mutebi and George Baguma will each hold 2.79 percent of shares in Cipla Quality Chemical Industries and they will each acquire 1.50 percent interest in the company, which is listed on the stock exchange.