MedTech Holdings disposes of subsidiary

Published: 21 August 2013

LOCAL pharmaceuticals manufacturer MedTech Holdings has completed disposal of its subsidiary, Zimbabwe Pharmaceuticals, closed in November last year due to its continuous loss-making and viability constraints.MedTech finance director Mr Patrick McCosh confirmed the sale yesterday saying the disposal was according to terms announced earlier.

"The company has been disposed and in relation to the article published in March confirming our intention to dispose, our position remained unchanged," he said.

However, Mr McCosh said he was not in a position to provide further details about the sale.

"As a listed company, MedTech is required under the Securities and Exchanges Commission of Zimbabwe regulations to clear shareholders cautionary statements or any other Press comment through the Zimbabwe Stock Exchange."

Medtech chief executive officer Mr Afzal Motiwala said: "The sale of the company is 90 percent done and we are still doing a few touch-ups with the Zimbabwe Stock Exchange to conclude the sale."

According to an official, MedTech Holdings board accepted a firm offer from one of the local companies (name withheld) for the entire shareholding of Zimbabwe Pharmaceuticals, for a reasonable sum, but with guarantees against historic debt with some security being put in place for the debt.

Buyers had been making frantic efforts to raise the security as agreed on the conditions of sale. Regulatory and shareholder approvals were needed for the transaction to reach finality.

The group is now looking forward to reaping profits without having to fund Zimbabwe Pharmaceuticals that has been operating with an uneven balance sheet. MedTech last year announced plans to offload the loss-making unit and then proceeded to shut down the associate due to viability constraints after which the firm announced the possibility that the business could be sold.

The company was also forced to shut down its plastic and textile divisions after succumbing to a US$109 000 loss, largely weighed by lack of capital in 2010. The group had plunged to a US$178 000 loss the previous year before funding challenges, closure of the two units and low production at Zimbabwe Pharmaceuticals conspired to affect the group’s 2010 profitability.

MedTech Holdings Limited is a Zimbabwe-based pharmaceutical manufacturing company also engaged in the marketing and distribution of hygiene, health and pharmaceutical products around Zimbabwe.
- herald