MDX Meldex

    RNS Number : 7104J
  Meldex International PLC
  08 December 2008
   

 For Immediate Release  8 December 2008


    Meldex International Plc ("Meldex " or "the Company")

    Disposal of Dexo France Business Unit to Reduce Bank Debt

    Restructuring update


    Cambridge, UK, 8 December 2008: Meldex International Plc (AIM: MDX), the specialty pharma and healthcare company announces that it has
entered into contracts to dispose of Laboratoires Pharmaceutique Dexo SA ("Dexo France"), it's French based prescription branded business
for a cash payment of EUR8.5m (�7.3m*). However, the Company retains the rights to the Dexo name outside of France. The completion and
consideration is expected to be received in the next two months, once regulatory paper work is approved by the French Authorities.

    This disposal process and its accelerated timing is to repay the Company's bankers. The funds received will be used to repay the
majority of an outstanding facility of �7m which was originally negotiated in October 2007. 

    Consequently, the Company reviewed its asset base and decided that the sale of the French prescription business (Dexo France) offered
the most attractive realisation of assets that could be achieved in the time frame available. The business was originally acquired as a
commercial platform from which Meldex intended to launch its own portfolio of X-gel based products. In addition the products in the Dexo
France portfolio required major investment in both new product development and marketing to create any growth, consequently Dexo was a
logical choice for disposal. The Company held discussions with several interested parties before completing the transaction in an
accelerated timeline with the proposed purchaser.

    Key products in the Dexo business include Alfatil and Physiomycine. Turnover in the six months to 30 June 2008 was EUR5.7m (�4.4m*) and
in that period the business achieved an operating profit of EUR52k (�40k*). The majority of turnover was from the wholesale distribution
business which only provides gross margins of 5%. Net assets of Dexo at 30 June 2008 were EUR3.1m (�2.7m*). 

    The Dexo business was acquired in 2006 and since that date certain non strategic products have been sold. Meldex retains its OTC French
business which will market and promote core brands that offer strategic growth opportunities, that operates from a lower cost base.

    The remaining assets of the Company including other leading products, new product development programmes and drug delivery technologies
are considered core growth drivers for the future and the Board does not intend to sell them.


    Restructuring update

    As part of the ongoing restructuring of the cost base new product development work is currently on hold. However, all Intellectual
Property relating to development projects remains the property of Meldex and is being maintained for future exploitation. The Company will
provide an update on the status of the development pipeline as part of the trading update that will be announced before the end of 2008.

    Non-core business operations and facilities that are not essential for the business moving forward have also been targeted. As a result
of this review the Tampa facility and the London office have been closed. 

    As a result of the disposal of Dexo France, the ongoing working capital constraints, the restructuring process and costs which the bank
have imposed on Meldex, results for the year ending 31 December 2008 and forecasts for 2009 will, regrettably, be below market expectations.
 

    A full trading update will be provided to the market later this month, along with the finalisation of additional working capital
facilities.


    Dr Jim Murray, Interim Executive Chairman, Meldex International said:

    "Following prolonged difficult circumstances including an offer period, restrictions on raising working capital and extensive management
changes, the Company is now well into the process of an extensive restructuring, including a review of the current interim Board structure.

    We are pleased to have been able to extract Meldex from this particular banking facility, a considerable achievement in the current
market circumstances. The consideration received reflects the distressed nature of the sale, imposed upon the Company by its bankers and a
lack of working capital. 

    We are looking forward to completing the restructuring and refinancing of the business and implementing the new business strategy. This
may include mergers and acquisitions provided that these enhance shareholder value."




    * All historical figures are translated at an exchange rate of �1: EUR1.29 being the average rate for the six months ended 30 June
2008.The figure in respect of net assets and the consideration receivable is translated at �1: EUR1.15, being the rate at 5 December 2008.



    For further information:

    Buchanan Communications                         + 44 (0) 20 7466 5000
    Rebecca Skye Dietrich / Tim Anderson

    FinnCap, NOMAD                                      + 44 (0) 20 7600 1658
    Geoff Nash






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