Sanofi, govt disagree on asset assessment

FT ONLINE

French pharmaceutical giant Sanofi now wants to do a rapid assessment of its assets in Bangladesh meant for disposing of its stake here despite strong reservations from the government side, officials said.

Six decades after producing key life-saving drugs, Sanofi Bangladesh Limited has already decided to wind up its Bangladesh operations citing 'strategic reasons'.

The government has a nearly 46 percent stake in the non-listed company whose paid-up capital was estimated at around Tk 360 million as of December 2017.

But the government stakeholders have expressed strong reservations about the global pharmaceutical company's plan which, they have claimed, goes against Section 31 of Memorandum and Articles of Association, according to the officials.

Sources said Sanofi high-ups shared the market asset evaluation plan with its government shareholders--Ministry of Industries and Bangladesh Chemical Industries Corporation (BCIC)--at the company's annual general meeting held at a city hotel last week.

A few days before the AGM, a meeting was held between Sanofi and government shareholders at the BCIC where the issue of market assessment was discussed.

In the meeting, Sanofi Bangladesh's country chairman Ramprasad Bhat said as part of the company's internal process, the group needs to go to the market and it will help Sanofi know about the value of shares.

In response, BCIC chairman Haiul Quaium suggested that the Sanofi high-ups place the proposal to the board before going for market assessment.

The chairman was also citing section 31 of articles of association where it is clearly mentioned that the sellers shall issue a notice to the board that the shares are to be transferred.

"It will be without the consent of the board if Sanofi goes to test the market. We don't accept the proposal," the document said.

Joint secretary of the Ministry of Industries Farzana Mamtaz, also a director of the board, recommended the Sanofi overseas stakeholders place the proposal before its next board meeting as the decision should be unanimous.

Charles Billard, the chief financial officer of Sanofi India and South Asia, took part in the discussion through videoconferencing and said very clearly that Sanofi is not asking for any permission rather it is an update only.

"It's an early notification and is not a subject for a unanimous decision as it is not a transaction rather a search for an alternative option only," Mr. Billard was quoted as saying.

When contacted, the BCIC chairman said they were trying to convince the drugmaker to change its decision from leaving the country which is enjoying strong economic growth of 8.2 percent.

"Sanofi alone cannot go for such market assessment without consent of the board," he said.

He, however, declined giving any further details about the development.

Despite repeated attempts over the mobile phone and through emails, Sanofi officials could not be reached for their comments in this regard.

Seeking anonymity, an employee of the company said that the local chapter of the group already informed its officials and staff of leaving the country amid protests after the news about its exit got published.

"The company high-ups are assuring them of clearing all the benefits and compensation before its exit," he said.

As of December 2017, the total assets of the company have been calculated at nearly Tk 5.15 billion and external liabilities amount to Tk 2.65 billion.

BCIC holds a 19.962 percent stake while the ministry of industries 25.396 percent and the multinational company 54.642 percent.

On the basis of net asset value per share, the BCIC invested Tk 498.64 million, the ministry invested Tk 634.38 million and the multinational firm invested Tk 1.36 billion. Profit per share was estimated Tk 102 in 2017 and retained earnings were Tk 1.50 billion.

Bangladesh's drug market has been expanding at a double-digit rate, reaching around US$2.0 billion. Sanofi holds over 2.0 percent share in the booming local pharmaceutical market.