Cipla’s exit from quality chemicals extended

Following yesterday’s notice, Africa capital works which was seeking to buy out Cipla from Quality chemicals industries indicated that the buyout which was expected to cost between $25m ( Shs 93.3 b)and $30m(Shs 112b) couldn’t be completed within the planned time-frame thereby requiring a new transaction close date.

“ Africa Capital works and Cipla Group have considered the time required to complete the outstanding conditions precedent and agreed to extend the date by which all conditions precedent must be satisfied by for the transaction to close ,” the notice issued by Africa Capital works reads in part, noting that the transaction close date had been extended to June 31 with the possibility of an automatic extension to July 31.

However the extension will delay the deal in which the Indian based drug manufacturer is seeking to dispose of its 51.18 percent stake in Cipla Quality Chemicals Industries.

Meanwhile following the disclosure notice to the shareholders filed through Bombay Stock Exchange, National Stock Exchange of India and Luxembourg Stock Exchange, Cipla indicated that it had on March 14 entered into an agreement with Africa Capital works in which it would dispose of its entire stake in Cipla Quality Chemical Industries Uganda held throughCipla ( EU)and Meditab Holdings.

However a notice filed through Uganda Securities Exchange Indicated that Africa Capital works had applied to Capital Markets Authority for approval of the transaction which if approved would impact the company’s shareholding.

“This transaction if approved will lead to a change in the company’s shareholding structure.

Shareholders and the public are hereby notified and advised to exercise caution when dealing in the shares of the company,” the notice read.

Currently no details have been provided on the status of Cipla’s application for grant of sale through the Capital Markets Authority and our media could not readily establish why the planned sale had to be scheduled for at least two more months.