Debt-laden Teva Pharmaceutical Industries said on Monday it would close an unprofitable plant in the Israeli port city of Ashdod in March 2019 after failing to find a buyer for the facility.
Teva, the world’s largest generic drugmaker and Israel’s biggest company, said in a statement half of the factory’s 175 workers would lose their jobs in the coming months with the rest continuing to work until the plant closes.
In December, Teva said it would cut 14,000 jobs – 25 percent of its global workforce – and close many plants as part of a restructuring aimed at helping to pay down debts.
“The Teva Ashdod plant is part of the reorganization process being carried out in Israel and around the world in order to reduce the cost base due to the heavy debt the company faces and the complex business circumstances it is dealing with,” Teva said in an emailed statement to Reuters.
“Teva has examined the possibility of selling the plant in recent months but unfortunately no suitable buyer was found,” it said.
Teva said some of the plant’s activities were outside of its core areas and the production of IV bags – which accounts for half the plant’s activity – was not profitable.
The company had been saddled with nearly $35 billion of debt after it bought Allergan’s Actavis generic drug business for $40.5 billion in 2016.
In February, it said it had reduced its debt by $1.1 billion from the end of 2017 while also selling bonds to restructure its short-term debt.
Israel’s Histadrut labor federation criticized Teva’s decision to shut the Ashdod plant, saying the company had no intention of strengthening or maintaining its activity in Israel.
Teva said it was holding a dialogue with labor unions to complete the layoffs with agreements.
By Steven Scheer
Source: Reuters
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