Ugandan company collapsing as Zambia fails to pay

Ugandan company collapsing as Zambia fails to pay

The directors of Pharmaceutical manufacturer, CiplaQCIL, have not recommended payment of a dividend for the financial year ended 31 March 2020 after the company announced a loss of Shs 36bn.

“The Company recorded a loss of UShs 36 billion in FY 2019-20 compared to a profit of UShs 7 billion in FY 2018-19 mainly due to the additional impairment allowance, drop in gross margins and increase in interest on overdraft,” said CiplaQCIL in a statement this week.

“The cessation of orders supplied to Government of Zambia (GOZ) combined with the impairment allowance for the delayed payments are the principal factors which have resulted in the Company recording a loss for the FY 2019-20.”

The deal to supply the Zambian government with medicine was inked during President Edgar Lungu’s visit to Uganda in 2015.

CiplaQCIL was to supply Anti-retrovirals (ARVs), Anti-malarials (ACTs) and Hepatitis medicines manufactured in Uganda to the Ministry of Health Zambia for a period of 20 years with reviews every 5 years.

ChimpReports now understands the CiplaQCIL Board, with the help of the Government of Uganda, has engaged Zambia to expedite the settlement of the outstanding balance.

Zambia has confirmed its intent to settle these receivables as soon as possible.

However, CiplaQCIL said it also was exploring other avenues to recover these funds and minimise the reduction in Zambia related revenue by increasing donor funded sales of malaria products.

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