After selling the generics injectible pharma business recently to US company Hospira for a whopping $400 million, the promoters of Orchid Chemicals & Pharmaceuticals Ltd have gone on a consolidation mode. As part of this exercise, the promoter group has raised its stake to 24% as against nearly 21.17% on December 2009.
Flush with funds from the recent sale of injectable pharma assets, the promoters have acquired about 2.5% stake in the open market (little over 17 lakh shares) between February 16 and 19, 2010, at a price between Rs 160 and Rs 165 a share, said market sources here.
According to sources, Orchid Healthcare Private Ltd, one of the promoter group companies, has acquired 700,000 shares or close to 1%, taking its stake in the company to 2.88%. Another main promoter R Vijayalakshmi has acquired 10.85 lakh shares or 1.5% stake, taking her total stake to 2.96% in the company.
Some of the other major promoters in Orchid are managing director K Raghavendra Rao with 8.88%, followed by Divya R (3.23%), Sowmya R (3.21%). ?The move is aimed at consolidating the promoters? holding in the company further to strengthen its operations,? the sources said.
In Decemeber last year, Orchid sold its generics injectable pharmaceuticals business to the US-based Hospira. The sale includes its beta-lactum antibiotics manufacturing complex comprising cephalosporin, pencillin and carbapenem facilities and its research & development facility at Irungattukottai near Chennai.
The company decided to utilise part of the sale proceeds towards retiring high-cost and long-term debts apart from meeting its working capital requires and also to buy back $150 million foreign currency convertible bonds. The company is said to have retained a sufficient liquidity to buy back its shares in the open market which would give the promoters an added strength to pursue new areas apart from strengthening its existing businesses through expansion and adding new capacities, the sources maintained.