Meldex sells Dexo for €8.5m in ‘distressed sale’ to repay bankers; well advanced in restructure
Meldex International plc, the specialty pharma and healthcare company, said it has sold Laboratoires Pharmaceutique Dexo SA, its France-based prescription branded business for a cash payment of €8.5m.
Meldex aid it retained the rights to the Dexo name outside France.
The disposal and accelerated timing is to repay the Company's bankers. The funds will repay most of an outstanding facility of £7m, originally negotiated in October 2007.
Interim Executive Chairman Jim Murray said: "Following prolonged difficult circumstances, including an offer period, restrictions on raising working capital and extensive management changes, the Company is now well into the process of an extensive restructuring, including a review of the current interim Board structure.
"We are pleased to have been able to extract Meldex from this particular banking facility, a considerable achievement in the current market circumstances. The consideration received reflects the distressed nature of the sale, imposed upon the Company by its bankers and a lack of working capital.
"We are looking forward to completing the restructuring and refinancing of the business and implementing the new business strategy. This may include mergers and acquisitions provided that these enhance shareholder value."
Meldex said it had reviewed its asset base and decided the sale of Dexo France offered the most attractive realisation of assets that could be achieved in the time frame available.
The business was originally acquired in 2006 as a commercial platform from which Meldex intended to launch its own portfolio of X-gel based products. In addition the products in the Dexo France portfolio required major investment in both new product development and marketing to create any growth, consequently Dexo was a logical choice for disposal.
Meldex's remaining assets of the Company including other leading products, new product development programmes and drug delivery technologies are considered core growth drivers for the future and the Board does not intend to sell them.
Non-core business operations and facilities that are not essential for the business moving forward have also been targeted in the restructuring. The Tampa facility and the London office have been closed.
"As a result of the disposal of Dexo France, the ongoing working capital constraints, the restructuring process and costs which the bank have imposed on Meldex, results for the year ending 31 December and forecasts for 2009 will, regrettably, be below market expectations", the Board said.
There was a 10% spike in the company's share price in morning trading. The share price was at 8.75p, close to 52 week lows, and way off the year's high of 91.0p. It currently has a market capitalisation of around £20.35m.
