Shareholders have expressed worry as British pharmaceutical and biotechnology company GlaxoSmithKline (GSK) Nigeria Plc announced plans to shut down its 51 years operations in Nigeria.
The company, whose primary activities include marketing and distribution of consumer healthcare and pharmaceutical products, said that its parent company, GSK Plc UK, had revealed its intent to cease commercialization of its prescription medicines and vaccines through its Nigerian subsidiary.
Part of the statement read, “In our published Q2 results, we disclosed that the GSK UK Group has informed GlaxoSmithKline Consumer Nigeria PLC of its strategic intent to cease commercialisation of its prescription medicines and vaccines in Nigeria through the GSK local operating companies and transition to a third-party direct distribution model for its pharmaceutical products.”
The company said it will be briefing its employees, whom it promised to “Treat fairly, respectfully and with care, meeting all applicable legal and consultation requirements”.
“Board is conscious that shareholders will have many questions; we have been working assiduously with our professional advisors to agree on the next steps and we will be shortly submitting to the Securities and Exchange Commission, a draft Scheme of Arrangement which may, if approved, see shareholders other than GSK UK, receive an accelerated cash distribution and return of capital,” it further stated.
Reacting to the development, the National Co-coordinator of the Independent Progressive Shareholders Association of Nigeria, Tony Omojola, said, “There is nothing we can do and due to our economy. There are no shareholders that one can call on to acquire their shares.
“As minority shareholders, we will take back our capital. This is going to lower our investment portfolio and affect the capitalisation of the market.”
The President of the Pragmatic Shareholders Association, Bisi Bakare, lamented the effect of the shutting down on unemployment in Nigeria.
She said, “We are not happy about it. This is different from the delisting that other companies are doing. Even when they delist from the Nigerian Exchange, they still retain their employees, which is good for the economy. GSK’s plan to exit from Nigeria is really of concern to investors.
“Their exit will add to the unemployment in our system. It is quite sad. They made their money here. Why are they leaving now that we need them the most? No one expects a company like GSK to make that announcement now, especially with what is going on in the country. We know that the environment is not conducive, but they are not the only ones in the system.”