Strides Pharma to Offload Singapore Manufacturing Plant for $15 Million

29 Oct, 2023

Strides Pharma to Offload Singapore Manufacturing Plant for $15 Million

Strides Pharma Science Limited, a Bengaluru-based global pharmaceutical company, made an announcement on October 27 regarding the sale of its subsidiary, Strides Pharma Global Pte Ltd in Singapore. The subsidiary has entered into a binding agreement with Rxilient Biohub Pte Ltd for the sale of a manufacturing facility, inclusive of licenses, equipment, vendor contracts, and more. In return, Strides Pharma will receive a total cash consideration of $15 million. Additionally, as part of this transaction, Rxilient Biohub will take over the long-term lease obligations associated with the manufacturing site from Strides.

Rxilient Biohub, a Singapore-incorporated company, primarily focuses on the production of pharmaceutical products and preparations for human use, as well as manufacturing vaccines for human use.

Strides Pharma emphasized that this transaction marks the successful culmination of their ongoing efforts to optimize their manufacturing network, with a continual focus on enhancing profitability and operational efficiency. The sale is anticipated to yield an annual cost reduction of approximately $9 million (around Rs 75 crore), including a reduction of about $2 million (around Rs 18 crore) in operating expenses, thereby leading to improved EBITDA. Furthermore, the deal is projected to result in a decrease of approximately $7 million (around Rs 57 crore) in depreciation and operating lease expenses, delivering an immediate boost to earnings per share (EPS), with an estimated annual gain of about Rs 7 per share.

The completion of this transaction is expected in the third quarter of the fiscal year 2024, pending necessary approvals and fulfillment of standard closing prerequisites. The proceeds from this transaction will be directed towards reducing debt, as stated by Strides.