Strides Pharma Sells Singapore Plant for $15M to Reduce Debt and Costs

Strides Pharma Science (Strides) has recently announced a significant development in its strategic restructuring efforts. The company has signed a binding agreement with Rxilient Biohub to sell its manufacturing facility in Singapore for a total of $15 million. The proceeds from this transaction will be allocated towards reducing the company’s debt. This sale also promises to yield substantial cost savings for Strides, with an annual reduction of INR 75 crore. Of this amount, INR 18 crore will be attributed to a decrease in operating expenses, while INR 57 crore will pertain to depreciation and operating lease expenses.

It’s important to note that this transaction will not have any adverse impact on the company’s revenues and is expected to be earnings per share (EPS) accretive. The Singapore manufacturing facility had been inactive since the previous year as part of Strides’ broader strategy to optimize its manufacturing network and cut costs, which was unveiled as part of the FY23 reset strategy.

Strides has been directing its efforts towards integrating its operations in the United States, and products previously supplied for US government procurement have already been transitioned to the Chestnut Ridge manufacturing site in the US. The company views this sale as the culmination of its ongoing manufacturing network optimization efforts, aligning with its core objectives of enhancing profitability and operational efficiency. The completion of this transaction is anticipated in the third quarter of FY24, contingent upon the receipt of necessary approvals.