As per the business transfer agreement, Orchid will transfer its Aurangabad API facility, an associated Chennai-based R&D facility and Penicillin and Penem API business to US-based Hospira, the proceeds of which would be used to de-leverage its debt position
New Delhi: Orchid Chemicals & Pharmaceuticals (Orchid) on Wednesday said it will sell various assets including active pharmaceutical ingredients (API) business and a R&D facility to the US-based Hospira Inc for $200 million (nearly Rs1,112 crore), reports PTI.
The Chennai-based firm’s business transfer agreement (BTA) with Hospira includes sale and transfer of its Aurangabad API facility, an associated Chennai-based R&D facility and Penicillin and Penem API business.
“The proceeds from this business transfer will be utilised for de-leveraging Orchid’s debt position and also pave the entry for the company's foray into newer product verticals,” Orchid Chemicals said in a statement.
As on date, Orchid’s debt stood at Rs2,200 crore.
As part of the deal, nearly 830 employees of Orchid would be transferred to Hospira, it said.
“...This business transfer agreement with Hospira will help us fast-track our future growth while maintaining a healthy debt profile in our balance sheet,” Orchid Chemicals & Pharmaceuticals CMD K Raghavendra Rao said.
On getting necessary approvals, the transaction is expected to be completed in the third quarter of Orchid’s 2012-13 fiscal year, corresponding to the fourth quarter (October-December) of the calendar year 2012.
An active ingredient is the substance in a pharmaceutical drug that is biologically active.
Given the current scenario, it is a prudent decision for Orchid to monetise these verticals and bring in cash to de-leverage its debt position and fund newer growth horizons, he added.
Orchid said it would continue to supply its cephalosporin APIs to Hospira in accordance with the long-term supply contract.
Further, Hospira would supply certain ingredients from the Aurangabad facility to Orchid under a long-term agreement that both companies have entered into, Orchid said.
“This agreement builds on the existing product development and commercialisation relationship between Hospira and Orchid,” it added.
“Our decision to acquire Orchid's world-class API facility demonstrates Hospira’s continued dedication to the antibiotics space, enhancing cost-competitiveness and ensuring continuity of supply,” Hospira India MD C Bhaktavatsala Rao said.
Latham & Watkins LLP acted as the international legal advisor and Amarchand, Mangaldas & Co acted as the Indian legal advisor to Orchid.
Orchid Chemicals & Pharmaceuticals develops, manufactures and markets various bulk actives, formulations and nutraceuticals.
Lake Forest-headquartered Hospira Inc is one the world’s leading provider of injectable drugs. In India, the company has a wholly-owned subsidiary— Hospira Healthcare India.
The state government on 11th August, cancelled a contract for widening of Theog-Hatkoti-Rohru road, awarded to a Chinese company for delay in execution of the project
Shimla: Himachal Pradesh government has cancelled the contract with a Chinese company for delay in executing a World Bank-funded road widening project in Shimla district, Public Works Department Minister, Gulab Singh said, reports PTI.
"The contract for widening of Theog-Hatkoti-Rohru road, awarded to a Chinese company was terminated on 11th August", the minister said in reply to a question.
Citing reasons for termination of the contract, he said inadequate funding and non-mobilisation of resources by Longjian Road and Bridge Company led to delay.
Singh said the Rs228-crore contract for construction of the 81km-long road was awarded to the company through global bidding.
As per the agreements, the construction work that began on 5 June 2008 was scheduled for completion in three years, he added.
The minister said that in the initial stage there was delay in transfer of land and getting clearances and work came to a standstill in 2009 when the Indian government cancelled the visas of employees of the Chinese company and most of the employees had to return to China.
The government had served three notices before terminating the contract through a consultant appointed by the World Bank, he said.
"To make the road motorable, the PWD spent Rs2.5 crore during the past three-four months, Singh added.
The Pune-based company has priced the proposed issue at Rs650 per share and would use the money to fund its non-banking unit
Issue of equity shares on a rights basis to its existing equity shareholders would aggregate to Rs941 crore approximately, Bajaj Finserv said in a filing on the BSE.
The Pune-based company has priced the proposed issue at Rs650 per share. The rights issue entitlement ratio is one equity share for every 10 shares held as on the record date.
The holding company, which is present in segments like lending to finance consumer durables, equipment and both life and general insurance, plans to plough the money to fund its share in its non-banking subsidiary.
The company has fixed 8 September 2012, as the record date for the purpose of proposed rights issue of equity shares.
The special committee constituted by the board also took note of the approval received from the Foreign Investment Promotion Board (FIPB) on 2 August 2012, it said.
FIPB's approval is for the issuance and allotment of equity shares up to 10.4% of the equity of the company to persons resident outside of