Strides Arcolab tanks on completion of sale of Agila Specialties

The stock was down over 14% to Rs 846 on the Bombay Stock Exchange.

Strides Arcolab has tanked over 14% to Rs 846 after the pharmaceutical company said it has completed sale of its Agila Specialties Division to Mylan Inc. for a total consideration of up to $1.75 billion.

However, the company said the terms of the deal included a holdback of $250 million contingent upon satisfaction of certain regulatory conditions. Since the initial announcement of this transaction, Strides now expects an additional expenditure of $150 million.

“Consequent to the warning letter received by the company for one of its units in Bangalore, Strides has agreed to a hold back of $250 million, which will be contingent upon satisfaction of certain regulatory conditions related to the injectable facilities in India. The company expects those contingent conditions will be satisfied sometime in 2014,” Strides Arcolab said in a regulatory filing.

Strides said it will release its final distribution details post the board meeting on December 10, 2013.

Meanwhile, the company said that its board will also consider and declare a special dividend during the meeting.

The stock opened at Rs 1,043 and touched a high of Rs 1,050 in early morning deals on the BSE. A combined 1.81 million shares have already changed hands on the counter till noon deals against an average sub 1 million shares that were traded daily in past two weeks on the NSE and BSE.