April 15, 2018 / 12:12 PM / 6 months ago

UPDATE 1-Israeli unions warn Teva Pharm over plan to close Ashdod plant

(Adds Teva comment)

By Steven Scheer

JERUSALEM, April 15 (Reuters) - Israel’s main labour federation intends to strike or take legal action against Teva Pharmaceutical Industries if the drugmaker does not suspend a decision to close a plant in the port city of Ashdod, it said on Sunday.

Debt-laden Teva, the world’s largest generic drugmaker and Israel’s biggest company, said last week that it would close the unprofitable plant in March 2019 after failing to find a buyer for the facility.

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 a letter to Teva’s management, the Histadrut federation said the company’s decision was contrary to a previous declaration that it would retain most of its activities in Israel.

The federation said it had been in contact with potential buyers of the plant who said that their requests to enter deal talks had been ignored.

A Histadrut spokesman declined to name the potential buyers but said there were two such offers.

The company has until Tuesday to provide an official response, Histadrut said in its letter, while a spokesman for the federation said the unions could go on strike or take the case to court.

Teva said that, over the four months since it announced a restructuring process aimed at reducing its cost base, it has examined the option of selling the Ashdod plant.

“The company reached a conclusion that this would not have business feasibility,” Teva said in an emailed statement to Reuters, noting that it wanted to give the unions a realistic and true picture in announcing the plant’s closure.

“That being said, it is important to emphasise that until the site’s closure the company will exhaust every option, including continued contact with relevant potential buyers.”

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 clearing debt.

Teva has said that some of the Ashdod plant’s activities were outside its core business and the production of IV bags — accounting for half the plant’s activity — is not profitable.

The company had been saddled with nearly $35 billion of debt after it bought Allergan’s Actavis generic drugs business for $40.5 billion in 2016.

In February Teva 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. (Reporting by Steven Scheer Editing by David Goodman)

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