Pharmabiz
 

Alembic to demerge pharma business, may enter in real estate area

Our Bureau, MumbaiTuesday, June 29, 2010, 08:00 Hrs  [IST]

Alembic Ltd, a Vadodara based pharma major, has decided to demerge its core pharmaceutical business in to a 100 per cent subsidiary company called Alembic Pharma Ltd and reorganization of its Vadodara undertaking. This restructure is subject to approval from shareholders and other bodies. As per the new plans, the company will demerge its domestic formulation, international generic and API business to its new subsidiary. However, it will retain its Vadodara manufacturing facility, which has fermentation facilities manufacturing Penicillin G & erythromycin thiocyanate and other products along with the power infrastructure and the land assets at Vadodara. Under the demerger scheme, the shareholders of Alembic will be issued one equity share having face value of Rs 2 each in the resulting company for every one equity share having face value of Rs 2 each held by them in the company. This will be in addition to the equity shares already held by the shareholders in Alembic Ltd. Post demerger, equity share capital of Alembic Pharma Ltd will be Rs 37.70 crore of which Alembic Ltd will hold 29.18 per cent. The share of new subsidiary will be listed on BSE and NSE. The demerger will allow the two companies to focus on their respective core businesses. Alembic Pharma will become a pure pharma player with focus on domestic formulation business and international business largely driven by the regulated markets and R&D activities. Alembic Ltd will continue to operate Vadodara undertaking whose products are largely commoditized and face competition from Chinese companies. In future, the company will also endeavour to develop its real estate into commercial and residential properties subject to necessary approvals. According to company source, this re-organization exercise will help unlock shareholders value and also help insulate core pharma operations from severe volatility and uncertainty of Pen G business of Vadodara manufacturing facility.

 
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