Cipla India sells its stake in Ugandan subsidiary

Cipla Quality Chemical Industries Uganda. PHOTO/FILE

Cipla Quality Chemicals (QCIL) has sold its majority stake or 51.18 pc of the total company’s ordinary shares to a Mauritius-based investment firm for $25 million (about Shs93.7 b,) after the firm decided to pull out and concentrate its investments in developed markets like Europe and Asia.

“The company hereby notices notifies its shareholders and the general public of the conclusion of the share purchase by Africa Capital Works SSA 3 (ACW) from Meditab Holdings Ltd (Ltd) and Cipla EU, both wholly owned by Cipla Limited (Cipla),” QCIL said in a statement on Wednesday.

With approval from a regional bloc, which was evaluating how this deal will affect regional competition by weighing feedback from suppliers, customers, and competitors, the two subsidiaries of Cipla India, the parent company of QCIL– Meditab and Cipla EU, agreed to sell a total of 1.9 billion shares to ACW.

Cipla’s buyout was first made public in April 2023, and the CMA approved it at that time as well. However, the long Common Market for Eastern and Southern Africa (Comesa) assessments forced it to be postponed for an additional four months.

Prior approvals from the Uganda Securities Exchange and Capital Markets Authority were prerequisites for the deal that were satisfied, before Comesa took on the impact of the deal on the region.

Africa Capital Works' legal counsel was Bowmans, and the stockbroker for the deal was Dyer and Blair.

The two firms that trail ACW's 51.18 percent stake in QCIL as of November 14, 2023, are Amistrad Limited and Standard Chartered Bank Mauritius a/c Capitalworks SSA 1 (with 11.51 and 11.15 percent stakes, respectively),

The National Social Security Fund (NSSF) of Uganda now owns 7.38 per cent of the pharmaceutical company, with 269.4 million shares.

Under the terms of the agreement, Emanuel Katongole, Frederick Kitaka Mutebi and George Baguma, the prior owners of the company, will each obtain an extra 1.50 per cent stake in QCIL, which they beneficially own through ACW.