Kilitch Drugs to divest its stake in Ethiopian subsidiary to HarmeeCare Pharmaceuticals

Kilitch Drugs (India) announced it's a strategic divestment of its entire shareholding in its Ethiopian subsidiary, Kilitch Estro Biotech PLC (KEB), to HarmeeCare Pharmaceuticals, an Ethiopian state-owned enterprise, in a transaction valued at USS14 million.

The proposed transaction, approved by the company's Board of Directors forms part of Kilitch Drugs' broader strategy to optimise its business portfolio, strengthen financial flexibility and accelerate investments in its pharmaceutical manufacturing operations in India.

The divestment will enable capital reallocation towards higher-growth opportunities in India, debt repayment and expansion of core pharmaceutical business The company intends to utilise the net proceeds towards reducing existing borrowings, lowering finance costs and supporting the phased expansion of its new manufacturing facility at Pen, Maharashtra.

Meanwhile, to maintain its commercial presence in Ethiopia, Kilitch Drugs proposes to enter into a long-term supply and technical services agreement with HarmeeCare Pharmaceuticals. The arrangement is expected to support the continued operations of the Ethiopian manufacturing facility while providing opportunities for an ongoing commercial relationship in the region.

The divestment is expected to be completed by January 31, 2027, subject to shareholder approval, applicable regulatory requirements and completion of the necessary transaction documentation.