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Leading Bangladeshi pharmaceuticals company raises US$21m via institutional placing
London, UK and Dhaka, Bangladesh, 10 October 2005 - Beximco Pharmaceuticals Limited ("BPL" or the "Company"), a Bangladesh based and listed pharmaceuticals manufacturer, today announces that it is to list on AIM having successfully completed an institutional placing of global depositary receipts ("GDRs"). The placing has raised around US$21 million (£12 million) (before expenses) for the Company, giving it a post-money market capitalisation of over US$100 million (£58 million) at the placing price. Libertas Capital is acting as nominated adviser and broker to BPL, which will be one of the first companies to have GDRs trading on AIM.
The Company manufactures and sells generic pharmaceutical formulation products, active pharmaceutical ingredients and intravenous fluids. BPL also manufactures under contract for GlaxoSmithKline and has recently entered into a contract to manufacture for Novartis. The Company's products are sold to retail outlets, medical institutions and other pharmaceutical manufacturers in Bangladesh, in regional markets such as Pakistan, Nepal and Myanmar and in other markets overseas, principally in East Africa (including Kenya) and South East Asia (including Singapore).
In its home market, where the population is in excess of 140 million, BPL is one of the leading generic pharmaceuticals company with around 8 per cent share of the Bangladeshi finished formulations market and over 40 per cent share of the infusions market.
BPL is based in Dhaka, Bangladesh, where it operates from a site spanning 20 acres and has over 1800 employees. The business generated revenues of approximately £23.5 million in 2004 and generated profits after tax of £2.8 million. It has some 50,000 shareholders in its home market and following the placing will have a freefloat of around 80%.
Over the last four years, the Company has invested over £25 million principally to establish a new plant at its site in Dhaka which is expected to become operational during 2006. Constructed to EU and US FDA standards, this plant will significantly increase manufacturing capacity, which to date has been the major constraint to growth, and is expected to facilitate the registration of the Company's products in a number of new markets including those in Europe and the USA.
Bangladesh today enjoys Least Developed Country ("LDC") status which allows the Company to operate in a favourable international intellectual property and regulatory environment. In particular, it is permitted under the TRIPS Guidelines (Trade Related aspects of International Property rights) to reverse engineer on-patent pharmaceutical products and sell such products within Bangladesh and to other LDCs. These laws, which were tightened earlier this year, have facilitated the rapid growth over the past decade of a number of generic pharmaceutical manufacturers, particularly from India. With India no longer having LDC status, its manufacturers cannot now operate under the exemption afforded to LDCs in relation to on-patent products. The Directors believe that, of the remaining LDC countries in the world today comprising over 700 million people, Bangladesh is uniquely well placed to exploit the TRIPS opportunity over the next decade by virtue of its highly skilled yet low cost workforce and the investments made in manufacturing facilities that meet the highest international standards.
Beyond the opportunity created by the TRIPS Guidelines today, management's strategy is to build BPL into a world class manufacturer of pharmaceutical products with its own proprietary research and development capabilities. The reverse engineering expertise of the R&D team today and the internal drive towards new product innovation and development will be central to the creation of this proprietary R&D capability.
BPL has raised around US$21 million (£12 million), before expenses, through a placing of GDRs with institutional investors. At the placing price, the Company will have a post-money market capitalisation of over US$100 million (£58 million) at the placing price. The Company is also offering one warrant for every three GDRs subscribed. If all the warrants, each representing one GDR and converting at a premium to the placing price, are exercised, the Company will receive a further US$8 million (£4.8 million), resulting in aggregate gross proceeds of almost US$30 million (£16.8 million). BPL intends to use the net proceeds from the placing to further increase manufacturing capacity, expand the product range and continue building the Company's international marketing and sales infrastructure. Some of the proceeds will also be used to repay borrowings.
Commenting on today's announcement, Nazmul Hassan, Chief Executive of BPL, said:
"The combination of BPL's existing, profitable domestic and export market position with the potential to expand into other LDCs, as well as into the developed European and US markets, provide us with a significant opportunity for growth. Our objective is to build BPL into a world class manufacturer of pharmaceutical products and the funds raised in the placing will enable us to exploit what we see as a unique opportunity to deliver substantial sales and profit growth for shareholders."
Enquiries:
Beximco Pharmaceuticals Limited
Today 0207 831 3113
Thereafter +880-2 8619151-5
Nazmul Hassan, Chief Executive
Salman Rahman, Vice Chairman
Website: www.beximco-pharma.com
Libertas Capital Corporate Finance Limited
+44 (0)20 7569 9650
Aamir Quraishi / Jonathan Flory
Financial Dynamics
+44 (0)20 7831 3113
David Yates / John Gilbert
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