Struggling generic drug maker and distributor, Sigma Pharmaceuticals, has found a new CEO to lead the company while it waits to see if it will receive a bid from South African group, Aspen Pharmacare.
Sigma yesterday revealed that it had appointed former PaperlinX Ltd chief financial officer, Mark Hooper, as its new chief executive.
Mr Hooper previously served as chief financial officer of Sigma from 2001 to 2006.
Mr Hooper will replace Elmo De Alwis, the CEO boss who resigned after reporting a $389 million loss that caused a breach of banking covenants and dropped the company’s shares more than 60%, exposing it to a possible takeover..
He is expected to take over as CEO and managing director in September.
The news saw the shares close up 1.5c at 49.5c, investors awaiting the more important news – the decision from Aspen.
Aspen started its four weeks of due diligence of Sigma under an agreement reached in late May.
That work will finish at the end of this month (a fortnight yesterday) and we should know by early July if Aspen will convert its intention to an actual offer of 60c a Sigma share via a scheme of arrangement.
That mooted price values Sigma at $700 million. It compares to the price of 91c the shares traded at before they were suspended in late February after the financial problems were spotted in the accounts and the write-downs became necessary.
In yesterday’s statement Sigma’s departing chairman, John Stocker, said Mr Hooper was an appointment "who will hit the ground running, with a deep knowledge of the company and the industry.
"Mark will be a critical element in Sigma’s next phase of development in conjunction with the Board headed by new chairman, Brian Jamieson, who takes over at the forthcoming AGM."
Mr Hooper was chief financial officer at Symbion Health Ltd from 2006 to 2008, before joining PaperlinX.
So he’s had considerable experience in the healthcare sector.
According to media reports this morning, he believes Sigma can remain independent.
PaperlinX managing director, Tom Park, said in a statement he regretted losing Mr Hooper.
Mr Hooper left stronger management and improved processes to help with the future growth of PaperlinX, Mr Park said.
Mr Hooper does bring some interesting experience to Sigma from his brief time at Paperlinx.(he started there in 2008).
That was a company whose business model was devastated by the credit crunch and global recession as demand for its paper products tumbled here and at home and it was forced into a quick sale of key assets to raise cash and keep restive banks happy.
It worked, and Paperlinx’s finances and operations have been recast and stabilised, but not after the loss of hundreds of millions of dollars, including asset write-downs and trading losses.
With a 2010 loss of $389 million, the need to sell assets and a short fall between debt (both on and off balance sheet) and change confronting its key sectors of generic drug making and distribution and pharmacy supply, Sigma is need of some of the skills Mr Hooper showed at Paperlinx.
We could know more about Sigma’s fate at the AGM which is due next Monday in Melbourne.
