Morepen Labs to raise Rs 200 cr ($45 mil) via preferential allotment
morepen.com
Our New Delhi Bureau (et)
15 November
MOREPEN Laboratories is planning to raise Rs 200 crore through a preferential allotment to one or two strategic investors. The funds will be used to finance the company's expansion plans and retire high-cost debt.
According to Morepen chairman and managing director KB Suri, while the company could go in for a preferential allotment of 25 lakh shares, amounting to 16 per cent of the company's present equity, it was confident of raising the amount through the issue of around 15-20 lakh shares at a premium of 40 per cent of the market price. The company now has an equity base of 15.6 million shares and its market price is currently hovering around Rs 750.
Morepen has secured permission for the private placement from its shareholders at its EGM last week. This is valid for a period of three months and the company is likely to finalise the premium and investors by mid-January. However, Mr Suri said it is possible that the placement may be deferred or conducted in phases as the fund requirement is over an 18-month span.
The company is in discussions with pharmaceutical companies, including MNCs, pharmaceutical funds and other possible strategic investors. "We are looking at one or two good quality strategic investors who will commit funds for a five- to seven-year time frame," said Mr Suri.
Around 20 per cent of the funds raised will be invested in the company's new bulk drugs project, 15 per cent in R&D, 13 per cent in its new contract manufacturing business, eight per cent in formulations, five per cent in its OTC business and 39 per cent for retiring high-cost debt. At present, the promoters hold 41 per cent equity in the company and the FIs 39 per cent, the remaining 20 per cent being with the public. " Our aim is to become a preferred generic supplier for the international market," said Mr Suri.
The company's turnover in ?98-99 was Rs 256 crore and it is targeting a turnover of Rs 1,000 crore by 2004.
Morepen has identified bulk drug contract manufacturing as a lucrative business for the future. According to Mr Suri, the company has identified 20 high-volume generic products and plans to enter into tie-ups with leading international generic companies to supply them these bulk drugs at a lower cost on exclusive basis. These drugs will be manufactured at the company's new industrial park in Baddi, Himachal Pradesh. "We are willing to set up dedicated facilities for our customers," he said. In the bulk drugs business, the company's existing portfolio includes Loaratadine, Cisapride, Sultamicillin and Sulbactam. Bulk drugs will be launched in the next six months including Atorvastin, a cholesterol reducer; Paroxetine, an anti-depressant; Losartan, an anti-hypertensive; Zafirlukast and Montelukast, both anti-asthamatics and Huvastatin, a cholestrol reducer. |
