Jubilant Pharma to raise over $100 mn from IFC and others

Financing will facilitate corporate reorganisation enabling JPL to achieve sustainable growth: IFC

Jubilant Pharma to raise around $50 million from International Finance corporation and another $60 million by way of quasi-equity. With this financing, JLS plans to consolidate its pharmaceutical business under JPL.

This financing package will help Jubilant Life Sciences Limited, India (JLS the Parent of Jubliant Pharma) to de-couple its pharmaceutical business from its life science ingredients (LSI) business and enhance shareholder value.

The proposed IFC-led financing package will help provide a counter cyclical and long-term financial support to Jubilant Pharma Limited, Singapore (JPL) and through JPL, to its parent company, Jubilant Life Sciences Limited, India (JLS or the Parent).

JLS will consolidate its pharmaceutical business under JPL, which primarily involves a transfer of JLS's Indian pharmaceutical assets to JPL.

JPL is a wholly owned subsidiary of JLS and with this financing, JLS plans to consolidate its pharmaceutical business under JPL. This financing package will help JLS to de-couple its pharmaceutical business from its life science ingredients (LSI) business and enhance shareholder value, according to project document.

Of the total outlay required for the Project and other growth initiatives over the next two to three years, IFC has been asked to provide part of the outlay and arrange a financing package of upto $200 million, including for IFC's own account A loan of $50 million and a quasi-equity investment of $60 million.

The World Bank's arm said that the proposed financing will facilitate the corporate reorganisation thereby enabling JPL to achieve sustainable growth.

JLS is part of the Jubilant Bhartia Group, diversified conglomerate with interests in pharmaceuticals, life science ingredients, food, retail, oil and gas and trading activity.

Promoted by Shyam Bhartia and Hari Bhartia, JLS employs 6,277 people globally, including 1,018 dedicated to R&D and in its pharmaceutical business; JPL employs more than 3,000 people, of which 50% are in India. The proposed investment will help maintain these jobs and create new ones, as JPL is able to launch new products, thanks to a stronger balance sheet, said IFC.

IFC is expected to mobilise $90 million in the form of parallel and "B" loans - including under the MCPP facility and other B/ Parallel lenders. "This will enable JPL to broaden its financing sources, which today are mostly India based and having a broader base of financiers is critical for JPL to pursue its continued growth plans," said IFC.