MONTREAL, Feb. 19 /CNW Telbec/ - Arura Pharma Inc. (TSXV: ARP) (“Arura”) is pleased to announce that its Board of directors has authorised a strategic re-organisation of Arura’s commercial activities in order to unlock value for its shareholders. Arura will now mainly focus on its established manufacturing and distribution of consumer health products unit in health, personal hygiene and beauty aids while keeping a separate economic interest in the promising Speciality Pharma business unit.
As part of this exercise, Mr. Daniel Pharand, current chairman of the Board of directors of Arura, has accepted to take on the function of Executive Chairman, while Mr. Ali Moghaddam has accepted to terminate his functions of Chief Executive Officer and director of Arura effective immediately in order to perform a successful spin-off of the speciality pharma activities of Arura.
Mr. Pharand declared that “the ongoing and anticipated level of activity of the established business unit manufacturing and distributing consumer products, with its record sales levels, commanded a level of focus of human and financial resources incompatible with the full development of its emerging speciality pharma business unit. The board would like to thank Mr. Moghaddam for his contribution to Arura and wish him success with the spin-off of the speciality pharma business unit”. Mr. Moghaddam noted that “following the acquisition of Silkit Pharma Corporation, the speciality pharma business unit now requires its independent pure-play structure to obtain exposure to its primary markets to fully develop its late-stage products and innovative platform and to be able to create value for Arura shareholders as investors.”
Mr. Pierre Fortin, Chief Operating Officer of Arura and in charge of its health and beauty operations added that “Arura will benefit from the addition of Mr. Pharand in an executive role, with his 25 years of experience in the manufacturing and pharmaceutical distribution industries in senior accounting, finance and investment positions. The re-focusing will also permit to concentrate on our vertical integration and to continue the development of new geographical markets for our key products such as the Neolia, Light Blue Shade and Karités brands, while focusing on both top and bottom lines”.
Reorganisation summary
As part of the refocusing on its core activities, Arura has converted its common shareholdings in Arura Speciality Pharma Inc. (“ASP”) and in Silkit Pharma Corporation (“Silkit”) in preferred shares having an aggregate redemption value equal to its aggregate investment at cost, namely one million dollars ($1,000,000), while the common equity in these corporations has been transferred to Mr. Ali Moghaddam at its nominal fair market value in a view of completing the spin-off of the speciality pharma projects. In addition to the preferred shares which are subject to retraction and immediate repayment or conversion into common equity in the event of liquidity transactions (such as listing of ASP shares on an exchange, change of control or similar transactions), Arura kept the exclusive north American distribution rights in the vaginal moisturizer to be developed using the Silkit platform and will receive 50% of the EBITDA derived from the current pipeline of ASP and Silkit products during a 36 month period, in consideration of which Arura committed to invest up to $200,000 in consideration of Preferred Shares of ASP over a 7 month period conditional on ASP not being able to obtain adequate financing within that period.
The Reorganisation is subject to regulatory approval including that of the TSX Venture Exchange as well as other customary closing conditions.
About Arura Pharma Inc.
Arura operates an established consumer health business unit manufacturing and distributing health, beauty and personal hygiene products in Canada, in the United States, Mexico and in Asia. Arura products, including the Neolia, Light Blue Shade and Karités brands, are distributed in most of the major pharmacies, warehouse type stores and food retailers.
The products manufactured or distributed by Arura consumer products business unit can be found on the web site of this division at: www.laboratoirecosmepro.com
Other Information
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.
Cautionary Statement on Forward-Looking Information:
This release contains certain “forward-looking statements” including, without limitation, expectations, beliefs, plans and objectives regarding the potential transactions and ventures discussed in this release. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are the risks inherent in pharmaceutical manufacturing and distribution, the need to obtain additional financing, the availability of needed personnel and fluctuations in general economic conditions.
For further information
Daniel Pharand, Executive Chairman, Arura Pharma Inc., (514) 984-4431, dpharand@pharcan.com, www.laboratoirecosmepro.com Ali Moghaddam, President, Arura Specialty Pharma Inc., (514) 770-3400, amoghaddam@arurapharma.com
Source: Arura Pharma Inc.
