The Hindu : Business : Orchid plans GDR issue

Online edition of India's National Newspaper
Thursday, Jun 16, 2005

Business

Business

Orchid plans GDR issue

Special Correspondent

To fund multi-therapeutic expansion; listing in Luxembourg

CHENNAI: Orchid Chemicals and Pharmaceuticals is planning a $100-million GDR (global depository receipt) issue to fund multi-therapeutic expansion and also to pare interest burden.

The GDR issue will have a greenshoe option of 15 per cent.

The board of directors, which met on Wednesday, cleared the GDR proposal.

A shareholders' meeting will be held on July 18 to get their nod.

According to Raghavendra Rao, Managing Director, the GDRs will be listed on the Luxembourg Stock Exchange. He expected the GDR issue in the next couple of months. Mr. Rao said Orchid had identified 87 molecules. Twenty products had been tied up with three companies for marketing. Development work on the remaining 67 was on and this required further funds. All these 67 molecules would go off patent soon, he pointed out.

Mr. Rao said a part of the proceeds from the GDR issue would be used to repay debt. Orchid would retire debt to the tune of $40 million.

This would result in a saving of around Rs. 10 crore in interest payment.

The board also approved the issue of 25 lakh warrants, convertible into equity shares to the promoter(s)/promoter group(s) in accordance with the SEBI (Securities and Exchange Board of India) guidelines for preferential issue.

Mr. Rao said the warrant issue was essentially to ensure that the promoters' holding post-GDR issue remained at the existing level of 18 to 19 per cent.

Orchid would also seek the approval of the shareholders for grant of 10 lakh options to employees in accordance with the SEBI (ESOS & ESPS) Guidelines, 1999.

Consequently, the authorised share capital of the company would be increased from Rs. 45 crore to Rs. 55 crore.

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