Stirling eyes contracts for new plantAmanda EllisThursday, 4...

Stirling eyes contracts for new plant
Amanda Ellis
Thursday, 4 March 2010

HEALTHCARE developer Stirling Products is in discussions to pick up contract manufacturing opportunities for the ?near-new? pharmaceutical facility in Cape Breton, Canada, which it has bought for a bargain $C3.6 million ($A3.9 million).

Stirling Product's new factory (Photo)

Yesterday, Stirling revealed the Ontario Superior Court of Justice had approved its acquisition of the facility from liquidators.

Stirling managing director Peter Boonen told BTN the acquisition was good news for the company.

?It?s an extraordinary acquisition and we are very fortunate to be able to get it both on the price that we did and on the terms that we did,? he said.

The former Keata Pharma facility is located on five acres of land in an industrial park in Cape Breton?s North Sydney.

It was put up for sale after the owners, who built it, were hard-hit by the fallout of the global financial crisis.

Keata and its parent company PharmEng International and sister company PharmEng Technology filed for bankruptcy and insolvency in April last year, 10 months after receiving a licence to operate the facility.

In December, Australia-based Stirling negotiated a purchase agreement with the PharmEng receivers, and paid $250,000 at settlement for the ex-Keata facility.

From August 26 onwards, Stirling will pay $25,000 a month for 30 months before completing the acquisition with a final $2.6 million payment.

Boonen said the replacement cost of the near-new facility is $20 million dollars.

?If we look at replacement value, it?s in excess of our market cap,? he said.

As security, Stirling has provided a company guarantee and charge over the facility.

Boonen told BTN the Hartigan Drive, North Sydney plant was bought as a going concern and was fulfilling some contract work under administration.

He said that in the past couple of weeks some contracts had ended.

?We are already in process of discussions with a number of parties,? he said.

Boonen said a lot of options were open to Stirling and it could either take up existing available work or secure new work.

?Specifically, our way forward, we need to sit down with a number of our partners and parties that are looking to work with us and determine what we are going to take on, and on what basis.?