Health Plus Crisis: Founder's Camp, Investor, Alta Semper, Trade Blame Over Funding Issue

Health Plus Crisis: Founder's Camp, Investor, Alta Semper, Trade Blame Over Funding Issue

- Court to hear contempt of court case involving Alta Semper and investors, Health Plus, over breach of order

- Alta Semper denies breaching order, says founder tried to shutdown Health Plus accounts

- Investor deny having financial problem, explains why it couldn't fund Health Plus under Bukky George

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The last has not been heard about the confrontation between Health Plus founder, Bukky George, and its majority shareholder, Alta Semper Capital, a foreign private equity firm. Both companies have been involved in a leadership tussle.

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The recent development in the internal faceoff is an alleged contempt of court, which Justice Oluremi Oguntoyinbo of the federal high court in Lagos, plans to hear with both parties as defendants. On November 4, 2020, the judge had ordered both Alta Semper and George to maintain the status quo while the dispute case filed by George is concluded.

Background knowledge of the Health Plus crisis

The dispute between Alta Semper and HealthPlus started last year after an investment deal between both parties. Alta Semper signed a deal in 2018 to invest $18 million into Health Plus for a controlling share in the company.

After five years of the deal, Alta Semper is expected to exit from the company. However, a spokesperson from the investment company told that there was no documented agreement to exit the company after five years.

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The investor was said to have invested $10 million as the first tranche but had difficulty in balancing the investment as at when due, twelve months after the first tranche. Alta Semper stopped funding Health Plus.

This action reportedly caused a rift between the equity firm and the founder of the pharmaceutical company. The dispute hit a climax when the investor allegedly attempted a hostile takeover of the company from George last year and sacked her. But the spokesperson stated that the claim was inaccurate publicly misleading:

"Alta Semper is already the majority owner of Health Plus, whose Board has simply exercised its right to terminate the employment of a CEO over corporate governance missteps in accordance with terms of her contract."

George's sack led to a court case

After her sack was announced, Chidi Okoro was appointed as the Chief Transformation Officer, but George countered her sack, stating Okoro wasn't appointed by her company.

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George had stated that the board was not complete during the vote, as two directors had resigned, but the investor's spokesperson said because directors resign doesn't mean the board stop functioning.

Health Plus Crisis: Founder's Camp, Investor, Alta Semper, Trade Blame Over Funding Issue
Health Plus Crisis: Founder's Camp, Investor, Alta Semper, Trade Blame Over Funding Issue. Photo:
Source: UGC

The spokesperson to Alta Semper said the majority of the board expressed their opinion in writing in line with the company's code of conduct, and George's contract was terminated.

It was confirmed that two out of a group of three voted to have her contract terminated, as George stayed away from board meetings.

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She initiated a court case against Alta Semper over her termination. After one of the hearings of the case, her counsel got a court order requesting the investor maintain the status quo after police attempted to arrest George in the court premises. The judge granted the request.

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Days ago, The Cable reported that the Justice said contempt of court proceedings against Alta Semper, Okoro, and other local persons, will commence. This was linked to the investor's action against Health Plus founder, Bukky George.

Alta Semper accuses George of breaching court order

A spokesperson with Alta Semper told that after the court ruled all status quo should remain, George herself broke the status quo haven taken the court statement to banks to request for the shutdown of Health Plus accounts.

The same accusation had been made against the investor as well. There had been a series of accusations against the investor, one of which included allegedly trying to change signatory to Health Plus bank account.

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But the spokesperson said:

"If you are running a company that has retail outlets across the country, if you are to maintain status quo, it doesn't mean you have to shutdown the company, don't sell drugs, don't pay salaries, kill the company.

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"Maintain status quo means no major action should be taken in terms of restructuring the ownership or management of the company. But in terms of Managing the company itself, the accounts, paying salaries, paying suppliers, and selling drugs and receiving sales, that can also go on.
"As of the day the court order was issued, she was no longer ceo, so status quo to us means today. Now, she has interpreted her own way, extrajudicially in front of banks."

George was appointed as the MD after the 2018 deal to continue running Health Plus, so a person occupying her position can be hired and fired by the board in line with the agreement, a person with inside information about the deal explained.

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It was heard that there was termination for cause based on the corporate governance of the company. She was said to have failed to meet performance conditions set in order to trigger the second tranche of funding.

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Health Plus Crisis: Founder's Camp, Investor, Alta Semper, Trade Blame Over Funding Issue
Health Plus Crisis: Founder's Camp, Investor, Alta Semper, Trade Blame Over Funding Issue. Photo:
Source: UGC

Does Alta Semper have financial problem?

Alta Semper had been unable to fund Health Plus with the second tranche. While the investor had claimed it didn't fund the Nigerian entity due to the way George was operating the company, and insiders told The Cable that Alta Semper is struggling with capital.

It was stated that the private equity firm has been unable to raise funds, hence, the failure to meet its investment responsibility to the pharmaceutical company after paying the first tranche.

The investor had reportedly got the first tranche on a debt considered too expensive, so it has been unable to secure cheap debt, an executive at a private equity firm said:

“The Alta Semper story is common knowledge in the PE circles in the UK. They clearly have problems raising money. Their original fundraised through two family offices was very expensive.

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“They are struggling to find new money at a lower cost. Seemingly, HealthPlus is one of their prime assets, especially with the COVID situation. There is a lot of pressure for Alta Semper to increase their stake and look for an exit or IPO.”

Alta Semper deny financial problem

However, Alta Semper denied it is in financial distress, stating that the investment company remains liquid for more investment. The investor told that it paused investment into Health Plus due to some corporate governance issues.

It was alleged that the initial $10 million infused into the Nigerian pharma firm was not being utilised properly, leading to the majority shareholder terminating George's appointment, a spokesperson for the said.

"To say Alta Semper has run out of funds is untrue. Alta Semper has actually invested over a $150 million in Africa, and some other investment are about to take place in Africa and Asia. So the issue of funds are not the problem.

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"The issue is Bukky Goerge does not even want the extra investment to come in. Because that extra investment will further dwindle the size of her current shares."

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Why Alta Semper couldn't invest in Health Plus

George was said to have pushed for the milestone to be put in the agreement during the deal negotiations, but she couldn't meet the milestone, which simultaneously affected Health Plus's financials, the official said:

"She thought she could deliver the world, which is always motivating to see an entrepreneur like that, but not only was the milestone not delivered, the company went into negative profit."

This compelled Alta Semper to decide to inject the money into tranches in order for the business to have the capital to keep operating, but the founder didn't agree with the offer in order to protect her ownership share, which the spokesperson put at 2 to 3 percent.

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Sharing more details, the spokesperson said:

"She is the shareholder that kept blocking us from inserting money for over a year, which is the other point of contention we have with her as partners, which is you are Blocking the business for personal gain, which is not acceptable.
"Since the (appointment) of CTO, we have started funding the company slowly in order to allow (continued operations). Inventories are back in the stores, we have a great new office, we've done some operational optimisation." was told that a single store or location hasn't been closed, so this proves the statement of Alta Semper being in a financial crisis to be false.

Alta Semper said it wants to resolve the dispute with George on the table, before infusing the rest of the $8 million. The company confirmed that only part of the funding has been inserted due to a legal agreement.

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Meanwhile, had previously reported that Nigeria had reportedly appointed KPMG to handle its Infrastructure Corporation of Nigeria (InfraCorp).

Out of four bidders, the Nigerian government was said to have selected KPMG as the preferred bidder for the investment company projected to become a N15 trillion project in capital and assets.

Fakoyejo Olalekan is a Business and Financial Journalist with over three years of experience in covering finance and business activities within Nigeria and offshore. Prior to joining, he worked at Nairametrics where he wrote financial and investment analysis articles. Olalekan is a resourceful and result-driven journalist with a track record for conducting extensive research and interviews to produce articles that provide different perspectives to market activities.


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