(Oslo, Norway, 8 January 2019) The Board of Directors of Vistin Pharma ASA (Vistin Pharma, OSE: VISTIN) has conducted a strategic review of the Energy Trading business following the development in the energy markets. The company will continue to manage the outstanding financial derivative contracts, but will not enter into new energy trading investments and close the Energy Trading business.
On 16 March 2018, Vistin Pharma announced the development of a new business area within energy trading. The ambition was to develop a trading business, which would profit from investment opportunities caused by fundamental changes in the oil and energy market. The company was planning to invest its own funds, as well as establish dedicated closed-end funds for specific investment opportunities.
To establish a sustainable business unit based on energy trading has proved to be demanding. The international energy markets have been challenging and the trading positions taken by the company has so far not performed as planned. The current market conditions have also made it difficult to raise external capital for closed-end funds.
Vistin Pharma has had an ongoing evaluation of the development of the Energy Trading business unit, and following the resignation of Torbjørn Kjus, Head of Energy Trading at Vistin Pharma, as announced 2 January 2019, the Board of Directors of Vistin Pharma has decided to close this activity. Consequently, no new energy trading investments will be made.
As announced on 4 January 2019, the company has financial derivative contracts outstanding to take advantage of the global change in sulphur specifications for marine fuel in the global shipping industry in 2020. Under these contracts, the company is financially exposed to the difference in USD price (spread) per metric ton between ICE low sulphur Gasoil and Sing380. The total contract volume is 150,000 metric tons, and the contracts expire on 31 December 2020. The market-to-market value of these contracts was negative USD 9.8 million (NOK 85.0 million) as of 31 December 2018.
Vistin Pharma will continue to manage the outstanding financial derivative contracts, and some or all of these may be closed when the company believes this to be in the best interest of its shareholders. Any reduction in the total volume outstanding will subsequently be announced to the market.
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For further information, please contact:
Kjell-Erik Nordby
CEO
+47 91 36 42 80
kjell-erik.nordby@vistin.com
Gunnar Manum
CFO
+47 95 17 91 90
gunnar.manum@vistin.com
About Vistin Pharma | www.vistin.com
Vistin Pharma is a Norwegian pharmaceutical company producing Metformin Hydrochloride (API). The Metformin is also available as Direct Compressible lubricated granules. As a solely dedicated European Metformin producer, Vistin Pharma is a well-positioned supplier to leading pharmaceutical companies. Vistin Pharma is headquartered in Oslo, Norway, and has highly qualified employees and a dedicated manufacturing facility in Kragerø.