Zydus Cadila Healthcare Ltd is planning to sell of the Andheri factory of German Remedies, it is learnt. Zydus Cadila currently holds 77.37 per cent stake in German Remedies.

The company is unlikely to appoint any consultants to structure the sale. The idea to sell the factory came up after a consultant made a presentation to Zydus soon after it took over GRL. The company was exploring various possibilities to rationalize the manufacturing operations which may include closure of the plant.

The proposed sale will also result in a voluntary retirement scheme for the current factory staff and negotiations are understood to be taking place with the unions.

As for the parent company, production can be concentrated in Zydus facilities in Gujarat. According to a former Zydus employee, the sale of the GRL factory is expected to net a huge sum for the company as the factory is located on the Andheri-Kurla road. Andheri East is a preferred destination by virtue of its proximity to residential pockets. The commercial property rates range between Rs 3000 and Rs 5000 per sq feet.

However, since this would be a one-time capital assets sale, it will not impact the topline, but will definitely bolster the bottomline.

The company has a factory at M Vasanji Road (Andheri-Kurla Road) and offices at Suren Road, near the factory, and Shiv Sagar Estate in Worli. While the Suren Road office earlier housed the accounts department of GRL and is now being used by a group company, the registered office is located at Worli.

According to information reaching here, there is no plan to sell off the offices at Suren Road, close to the factory, or the registered office in Worli. The other manufacturing units of the company are located in Patalganga in Raigad district of Maharashtra and Ponda in Goa.

A multinational real estate researcher claimed they knew about the impending sale long back.

The company has also plans to develop the Mumbai office as a major commercial growth centre for the Ahmedabad-based major. The move appears to be in view of the fact that various companies which have facilities in Mumbai are shifting manufacturing works outside the city in view of the huge cost incurred here. However, there is no plan to shift the entire Zydus marketing team to Mumbai as of now. This would be difficult as Mumbai is expensive.