Mumbai-based Veronica Labs has converted Rs. 2.25 crore worth unsecured loans into equity. However, the loan converted is less than what was proposed by the company officials earlier. In October this year, company's managing director Bipin Shah had proposed to convert Rs. 3.5 crore worth unsecured loans into equity.

Senior company officials told Pharmabiz.com that barring one creditor none were ready for the conversion. "Only Hakeem Auto agreed for the conversion of its loan of Rs. 2.25 crore into equity. Subsequently 19,82,378 shares have been allotted to the creditor," said Ulhas Deosthale, director, Veronica Labs.

With this allotment, the capital base of the company has touched 12.50 crore.

The company board in October had also proposed to issue fully convertible debentures aggregating to Rs 5 crore with a 7.5 per cent interest per annum and to issue equity shares on a preferential basis to corporate bodies with a view to restructure the high cost debt of the company. The company's aim is to make its capital base reach Rs. 20 crore. "We are yet to get shareholders approval for the proposed plan," said Deosthale.

The expansion in capital base will enable VLL to refocus its efforts on manufacture and marketing of Ayurvedic drugs from allopathic drugs. A fund of Rs 5 crore has been earmarked for conducting clinical trials of Herbovera, an immuno modulator medicine for AIDS & HIV patients. The company recently obtained FDA approval from the Maharashtra Government for this drug.

Besides this, VLL would foray into nutraceuticals and cosmetology drugs.

The company recorded a turnover of Rs 10.4 crore for the quarter-ended September 30, and a net profit of Rs 85 lakh during the same period. Veronica expects to close the fiscal 2002-03 at Rs 28 crore in turnover compared to Rs 23 crore posted during 2001-02, said officials.