Relad Pharma, one of Romania's major drug distributors, and Relad International, a company operating drug imports, are going to contract a loan worth as much as 60 million euros, according to a statement published in the Official Gazette.
According to a decision by the General Meeting of Shareholders, Relad Pharma will act as a borrower/co-borrower together with Relad International to contract the loan.
The company's representatives chose not to make any comment on this information.
The shareholders in Relad Pharma are Relad International (99.6938%), Expert Finance International (with a stake of 0.1224%), West Management International (0.1163%), Zigu Sterie (0.0613%) and Relad Logistic (holding 0.0062%).
On the other hand, the shareholders in Relad International are West Management International (40%), Expert Finance International (40%), Zigu Manu Tiberius Marius (20%).
The loan will be secured through receivables, freight stocks, and other guarantees. Relad group last year generated turnover worth above 200 million euros.
In 2005, the company reported turnover in excess of 130 million euros on the distribution segment alone.
The first Relad warehouse was set up in Bucharest in 1994 and the company currently owns a central warehouse and 15 local warehouses equipped with all storage facilities, according to the information displayed on Relad's website. At the same time, Relad group has 600 employees and owns a car fleet made up of 270 vehicles.
Domestic players on the drug distribution market have sealed some of the largest financing deals lately. Thus, A & D Pharma borrowed 100 million euros in 2006, while Fildas managed to draw 80 million euros from banks this year.
Under the circumstances, Relad may become the third biggest player on the domestic pharmaceutical market to contract loans worth above 50 million euros.
The tightening competition on this market and the shrinking profit margins, are pushing the companies in this sector to seek large funding.
Relad's main rivals on the segment of drug distribution are Mediplus, part of A&D Pharma, Farmexim, Farmexpert, Polisano, Europharm Distributie. At present, there are several tens of significant distributors, but their number has started to go down as the first major mergers and acquisitions have been concluded on the market starting 2006.
Representatives of companies operating on the segment of drug distribution say, though, that there will be more deals on this segment in 2007, when major European players are expected to arrive on the market.
The domestic pharmaceutical market last year reached a level of 1.5 billion euros, amid a growth pace of almost 20%.
Drug distributors need money
A&D Pharma was the first such player to take out a loan, borrowing 100m euros last year
Fildas group of firms this March announced it contracted a loan worth 80 million euros
Relad group is likely to raise as much as 60 million euros soon, the third largest borrowed sum on the segment of distribution
Loans contracted by players on the distribution segment may thus get close to 250m euros
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