A leading Ukrainian pharma company, YURiA-PHARM, has acquired Reka-Med, a pharmaceutical company in Uzbekistan, with the help of €10 million of finance repurposed from an existing loan made by the European Bank for Reconstruction and Development (EBRD).
The EBRD loan will allow YURiA-PHARM, which exports 30 per cent of its production (of which 15 per cent is exported to Uzbekistan) to produce pharmaceuticals locally for the Uzbek market and free up about 10 per cent off its production capacity inside Ukraine to allocate more critical medicine to the home market. The top-five manufacturer sells its products across Ukraine and exports to more than 40 countries.
Buying an Uzbek company to manufacture locally was the best strategic response in view of Russia’s war on Ukraine, which has made exports more difficult and expensive.
“This transaction will increase the availability and affordability of drugs in both Ukraine and Uzbekistan. It will also improve YURiA-PHARM’s profitability and will diversify production risks in locating additional manufacturing site outside of Ukraine. It also supports a cross-border acquisition and internationalisation of the company’s operations, making YURiA-PHARM more competitive,” said Matteo Patrone, EBRD Managing Director, Eastern Europe and the Caucasus.
YURiA-PHARM’s main operating unit, LLC YURiA-Pharm, which manufactures prescription medicines and medical devices, signed the original loan agreement with the EBRD in May 2019. It borrowed €25 million in two tranches: a committed first €15 million for improvements in packaging lines and the introduction of an affordable customised doses cancer treatment, along with energy efficiency measures; and an uncommitted second tranche earmarked for further production improvements. This €10 million second tranche has now been committed and repurposed in order to acquire Reka-Med.
The EBRD, Ukraine’s largest institutional investor, has stood firmly by the country since the Russian invasion. The Bank has pledged to invest €3 billion in Ukraine’s real economy in 2022-23, and in 2022 deployed €1.7 billion as well as a further €200 million mobilised from partner financial institutions. The loan to YURiA-PHARM was supported by a €2.5 million first loss risk cover guarantee from the EBRD’s Crisis Response Special Fund.