The decision to initiate this process has been taken following a strategic review of the operation which has not been profitable for several years. The facility employs approximately 140 people. As part of this activity, appropriate consultation with employees will now commence. Recipharm will also discuss with clients the potential to transfer manufacturing to other facilities in the Group to minimize any possible impact on patients.
The operations in Ashton-under-Lyne generated a negative EBITDA over several years, averaging approximately SEK 18 million over the past three years. In addition to this the licence restrictions imposed by the UK Medicines and Healthcare products Regulatory Agency (MHRA) will impact 2018 result by approximately SEK 8 million. Activities to address the deficiencies identified are currently being executed according to schedule but the licence restriction is likely to remain in place until these are completed which we anticipate being during the first half of 2019. Discontinuing operations in Ashton would lead to an EBITDA margin and profitability improvement in the strategic business segment Solids & Others. Estimated non-recurring costs of SEK 122 million associated with a decision to discontinue operations will be charged to the Q4 2018 results. This includes severance costs, asset impairment and the effect of fulfilling contractual commitments.