Macter International to raise Rs1.1 billion through rights issue

Web DeskWeb Editor

13th Jul, 2021. 07:24 pm
Macter International to raise Rs1.1 billion through rights issue

KARACHI: Macter International Limited will raise Rs1.1 billion through the issuance of 6.66 million rights shares (17.03 ordinary shares for every 100 shares held) at Rs165/share.

In December last year, the board of directors discussed various inorganic growth and acquisition-related investment and financing opportunities potentially available and authorised the company management to evaluate these potential acquisition opportunities and conduct feasibility/hire consultants.

An industry official said the market conditions were not favourable for the pharmaceutical companies, and several small-scale companies were either winding up, while those having manufacturing facilities and/or somewhat established brands were up for sale.

The market is abuzz with reports that certain big business houses are interested in acquiring another pharmaceutical, Barrett Hodgson Pakistan. No one at Barrett could be reached for comments.

“The cost of production has gone up as many raw materials, which came from India, were banned and the companies had to opt for the European raw materials. The established companies don’t buy Chinese raw materials and imports from Europe were expensive,” an official at a leading pharmaceutical company said.

“Besides the cost of selling had also shot up. Now, there are scores of companies offering lucrative discounts along with even more lucrative favours to doctors and buying agencies, due to which [the] companies have to allocate higher selling budgets. In turn, [the] doctors prescribe their products big time. Most of the cottage pharmaceutical companies having niches cannot sustain,” the official added.

“Considering the current market price of the company, the premium charged over the par value for right issue prices at Rs165/share inclusive of a premium of Rs155/share, is justified and is also in line with the prevailing market practice,” Macter noted in a bourse filing.

Macter is among the top five pharmaceutical manufacturers by volume, and the largest contract manufacturer in Pakistan, particularly for the multinational companies with one of the most advanced production facilities offering a wide range of dosage forms.

The company has taken steps to ensure that its pharmaceutical ingredients’ used in the manufacturing of healthcare products are from Halal sources and has taken Halal certificates for its majority products from an accredited Halal certification body.
For the nine-months period ended March 31, 2021, Macter posted a net profit of Rs110.9 million. The net sales declined 10 per cent over the same period last year. This was mainly due to the lower institutional/tender business sales.

The company noted in its latest financial report that patient flow in clinics and hospitals has improved though it remains lower, compared with the last year. The company expects prescription sales to pick up with the normalisation of patients flow as the intensity of the third wave of Covid-19 subsides.

“[The] annual inflation linked price increase and operational efficiencies are expected to support [the] financial performance. A resurgence or spike in [the] Covid-19 infection remains a significant external risk,” the report noted.

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