Board of Morepen Lab approves investment proposed by Corinth Group

On 28 April 2021

The Board of Directors of Morepen Laboratories on 28 April 2021 approved the investment proposed by Corinth Group (Corinth), a global private investment Group (www.corinthinvest.com) headquartered in Switzerland, 'to the extent of USD 32.50 million in the parent company, Morepen Laboratories (Morepen) out of a total USD 100 million investment in the promoter group, subject to approval of the shareholders and other regulatory bodies.

Following shareholder and regulatory approval, Corinth would be allotted 58.50 million new Equity shares on preferential basis. This shareholding would equate to 9.41% equity stake in the Company on a fully expanded capital base. The balance USD 67.50 million would be in the promoter group companies.

The Board of Directors has also approved allotment of 50 million fresh Equity Shares to the promoter group, at a price determined by the Securities and Exchange Board of India (SEBI) pricing formula for preferential issuances, in lieu of the 98.50 million unsubscribed warrants issued in the last financial year which lapsed due to technical reasons. While the new allotment would be at Rs 38 per share, which will be 52% higher than the earlier price of Rs 25 per for each warrant. After subscription of all the warrants, the promoter's stake in the company would go up to 44.28%, from 34.54%, on a fully diluted basis.

Accordingly, the Total Fund Infusion in Morepen Laboratories including investor funds and promoter's equity, will be Rs. 565 crore. The funds would be used in:

a) The expansion/scaling up of the company's R&D centre/facilities to meet the significantly enhanced Active Pharmaceutical Ingredient (API) demand, a market size of US$40 billion, that Morepen has in the pipeline for the next 3 years.

b) Setting up new USFDA standard API plant to meet the significant ramp up in scale and pipeline the company is working on.

c) Establishing a world class facility for Finished Dosages as per USFDA standards at Morepen's pharma complex in Baddi, Himachal Pradesh, to cater to highly sophisticated/regulated markets such as the USA and Japan

d) Investment into world class diagnostics facilities including the manufacture of critical inouts/components/enzymes to meet regulated market standards. India is seeing an exponential jump in household spend on Point of Care/Home Diagnostics and Oxygen Concentrators and other life support systems with demand currently outstripping supply.

e) Investment in new products and brands under the Dr Morepen umbrella, an existing household brand, to leverage its pan India distribution/supply chain and exponential growth in online sales.

f) Investment in new age Personal Care/Skin Care brands Gubb and Happier that are seeing exponential online sales, as well as to leverage our Pan India pharmacy/retail chain network to significantly scale up distribution.

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