RPG Life Sciences, the Mumbai-based Rs 135-crore plus pharmaceutical company, is planning to set up a new bulk drugs facility at Thane with total capital outlay of Rs 10 crore. The new plant will be set up as per US FDA standards for manufacture of bulk drugs. Further, the company is upgrading its Ankleshwar plant by investing around Rs 5 crore as per US FDA norms.

In order to support the expansion plans and strengthen its financial position the company is raising Rs 31.43 crore by issue of 20 lakh equity shares of Rs 10 each for cash at premium of Rs 148 per share on preferential basis. Further, RPG is also issuing 6 lakh warrants with an option to apply for and be allotted one equity share of Rs 10 each against each warrant at a premium of Rs 148 per share. The new shares will have a lock-in period of one year.

While talking to shareholders at Extra-ordinary General Meeting, H V Goenka, chairman, said, "After achieving turnaround in the first nine months of the current year, the company decided to focus on US market as growth area and now taking steps to installed new facilities. The new facilities will be operational by December 2006."

RPG Life has closed down its fermentation bulk drugs plant in Pune during 2004-'05 due to the high cost of operations and the sharp decline in prices of the end products. The company is currently negotiating compensation of leasing the plant with Hindustan Antibiotic Ltd. Goenka said that the company is now planning to enter US market in a big way with the help of new facilities. It is planning to undertaking manufacturing of Anti-cancer, cardiovascular and CNV drugs in near future. The company is likely to generate 30 per cent growth in net sales in the current year and will able to declare equity dividend, Mr Goenka added.

The post preferential holding of promoters will be 45.78 per cent and that of FIs, Mutual Funds/banks and FIIs will be 13.23 per cent. After the proposed preferential offer, the public holding will increased to 40.66 per cent from 33.07 per cent.