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Sanofi to help restructure EuroAPI

French-based CDMO EuroAPI has reached an agreement with Sanofi to finance the implementation of its Focus-27 restructuring programme through a €200 million perpetual subordinated hybrid bond. Sanofi, from which EuroAPI was originally spun out, remains its main shareholder and customer. It also agreed in principle to reserve minimum available capacities for selected products manufactured by EuroAPI through a €54 million payment.

Under Focus-27, which was revealed in February after a “comprehensive analysis of the company’s operational strengths and weaknesses”, EuroAPI aims to “improve competitiveness and unlock sustainable and profitable growth by refocusing on high-value and growing market segments” over the course of four years. This will involve:

* Streamlining the portfolio to focus on the most profitable APIs, while discontinuing 14

with net sales of about €40 million * Focusing the CDMO offer on late-stage, high-value, complex small molecules and ‘tides’

* Divesting sites at Haverhill, UK, and Brindisi, Italy, where operations are currently suspended following revelations of local malpractice, thus raising capacity utilisation at the remaining four from 6% to 80%

* Investing €350-400 million on strategic initiatives in areas of focus, notably large molecules, vitamin B12, prostaglandins, corticosteroids, hormones and opiates

The company aims to generate €75-80 million in annual run rate incremental core EBITDA by the end of 2027 but will incur restructuring costs of about €110-120 million, not including the divestments. In addition to Sanofi’s aid, it is in discussions with its banks to amend the terms and extend the duration of the €451 million revolving credit facility it signed in 2022.

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