Under the alliance, additional equity worth $1 million is proposed to be issued to Synpac and the shares of Kopran Drugs are to be listed shortly. The promoters' holding (of around 60 per cent) will be split on a 50:50 basis (approximately Rs 4.3 crore each) between Synpac and Parijat Enterprises, the umbrella holding company of the Kopran group.

Synpac Pharma is part of the Koo family of Taiwan, one of the largest industrial houses there, with interests in industries ranging from banking to tyres and a turnover of around US $25 billion. Synpac also has associate companies, Synpac Kingdom Pharmaceuticals, in Taiwan and a subsidiary in Carolina, USA, engaged in biotech research and development.

According to a company press release, Synpac's contribution to the alliance would also extend to the marketing of penicillin-based bulks in the Far East and North America. The UK-based company which manufactures more than 4,000 MMU of penicillin, recently commenced manufacture of 6-APA through a new technology, thereby reducing the cost of semi-synthetic penicillins (SSP). Kopran Drugs would supply the enzyme for Synpac's new penicillin plant. The company's SSP plant is accredited with approvals from various regulatory authorities like the US FDA, the UK MCA and South Africa's MCC.

Kopran's Khopoli plant has a capacity of 1,200 tonnes, which can be expanded to 2,000 tonnes, especially in the area of amoxycillin. This is significant given that leading amoxycillin and clauvulinic acid combination, Augmentin (from SmithKline Beecham) is set to go off patent in January 2000. This would open up the generics market and in turn boost demand for amoxycillin.

The Mumbai-based Kopran had in 1998 announced plans to restructure its business by spinning off its SSP business into a separte entity and transferring its R&D activities into a wholly-owned subsidiary. Existing shareholders of Kopran received one share of Kopran Drugs free for every two shares held.

The balance consideration was to be received by way of allotment of optionally convertible cumulative preference shares (CCPS) and preference shares to Kopran Ltd. The CCPS carry a dividend of 12 per cent and can be converted between 24 months and 36 months at a price of 75 per cent of the average preceeding 10-weekly price. This offer closes on August 16. Kopran shareholders have been given an opportunity to buy these CCPS from the company at par.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.