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| Thursday, 26 February 2004 |
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40% shares of State Pharmaceuticals to be divested by Sudarshana Perera Cabinet has given the green light to partly privatise the State Pharmaceutical Manufacturing Company (SPMC) through the sale of 40% shares to a competent pharmaceutical manufacturer retaining a major equity holding under state control. The new move is targeted at enhancing manufacturing a wider range of drugs and introducing major expansions technology, sales and marketing. The management of the SPMC will be vested with a new investor who will pump capital to strategise the organisation. Employees will be given 10% of its stock. Director General of Public Enterprises Reform Commission of Sri Lanka (PERC), Manjula De Silva said that that divestiture of a part of the stake will help to get a value added partner to expand the manufacturing capacity and produce essential drugs for the local market. "The investor should have the capacity to introduce the latest technology The privatisation process will also be carried out in stages under the direct supervision of the government", De Silva said. PERC sources said that sale of minority shareholding is done subject to the condition that the companies which are experienced in the manufacture of pharmaceuticals will be required to refrain from marketing their own branded products in Sri Lanka. "The successful bidder for the shares will be eligible for three seats on a seven member Board of Directors of the new company, and to certain pre-designated positions in the enterprise. The investor will also be required to make a quantified infusion of capital to expand and develop the new company in the medium term", PERC said. The successful bidder will be entitled to a pre-determined management fee on the basis of a percentage of both turnover and profit, for a specified period of time. The equivalent of the 10% of the shares to be offered to the private sector investor 4% of the issued capital of the New Company will be given to the employees of the company, following the transfer of the minority shareholding. PERC also said that The Technical Evaluation Committee and the Divestiture Committee will be appointed shortly to plan and execute the sale of the minority shareholding. Consultancy services will be sought to effect the conversion of SPMC into a Public Company and to provide financial, legal and other advisory services to the Technical Evaluation Committee and the Divestiture Committee. |
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