SOUTH AFRICA — South Africa’s biggest pharmaceutical manufacturer, Aspen Pharmacare, has closed its multi-currency, syndicated term loan and revolving credit facilities agreement totaling US1.31 bn (R22.4bn), to refinance its syndicated loan facilities from 2018.
The facilities were structured across Euros (EUR), South African Rand (ZAR), and Australian Dollar (AUD) term and revolving credit facilities, with tenors of three to four years and additional extension options available.
A total of eighteen lenders committed to the facilities from across the United States of America, Europe, Africa, Australia, and Asia, comprising existing core relationship banks according to the company’s press release.
All facilities were consolidated into a single facility agreement, with all the eighteen lenders ranking pari-passu.
Following primary syndication, the transaction was significantly oversubscribed thereby providing substantial scale-back to the lenders.
“We are very pleased with the outcome of this syndication, particularly noting the current global risk-off sentiment. It is encouraging to see that all invited lenders have supported the transaction, which is a testament to their confidence in the Aspen Group,” group CEO Stephen Saad said in a brief statement.
In another notable milestone, Aspen recently concluded a 10-year collaboration agreement with Serum Institute of India Pvt Ltd to manufacture and make available four Aspen-branded vaccines for Africa.
Under the Agreement, Aspen SA Operations secured a license to the enabling know-how from the Serum Institute and there is a good faith undertaking between the Parties to discuss the expansion of the Agreement to include new products or new versions of the Products.
In addition to the Agreement, Aspen also anticipates receiving grant funding from the Bill & Melinda Gates Foundation (“the Gates Foundation”) and the Coalition for Epidemic Preparedness Innovations (“CEPI”).
The funding will be channeled to support African regional manufacturing capacity for the affordable supply of vaccines to, among others, African countries and Gavi/UNICEF, as well as contributing to pandemic preparedness through rights to a share of Aspen’s vaccine manufacturing capacity over a period of ten years.
A group of global financial institutions led by the World Bank’s International Finance Corporation (IFC) partnered with Aspen at the height of COVID-19 pandemic to facilitate an increase in vaccine manufacturing know-how in Africa.
The deal was designed to refinance existing Aspen debt and strengthen the company’s balance sheet, supporting Aspen’s operations including production of vaccines, and other therapies, in African and emerging markets.
The hype of its impact has dwindled as international support for localized vaccine production fails to secure any vaccine orders, threatening to undermine efforts to build a homegrown vaccine industry on the continent.
Popular mRNA vaccine manufacturers have recently experienced a drop in demand, resulting in costly inventory write-offs. Now, Aspen Pharmacare is also experiencing a significant slowdown.
According to the Africa Centres for Disease Control and Prevention (CDC), only one-fifth of adults in Africa are fully immunized against COVID-19.
It falls far short of the goal of vaccinating at least 70% of its adult population, or approximately 800 million people.
The public African vaccines market is currently worth US$1.3Bn (vs US$25Bn for African pharmaceutical sales) and represents approximately 4% of global public market value but up to 25% of global public volumes.
The market could reach approximately US$2.3 billion and US$5.4 billion by 2030 as a result of increased access, demographics, pricing, transitioning from Gavi, and emerging vaccine products and technologies.
Currently, GAVI/UNICEF supply division plays a significant role in the African vaccines landscape providing secure long-term contracts for the market volume.
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