Glaxo Sales Jump 16% In First Five Months

Glaxo executives parried questions about the proposed merger with Burroughs Wellcome and said operations are being conducted under the same management.

Replying to persistent shareholder queries, Khusrokhan, Glaxo managing director, said, "The merger is only a legal formality and both Glaxo and Burroughs are operating with the same management."

He added that valuers are working on the ratio and an announcement will be made soon.

The overseas parents of Glaxo and Burroughs Wellcome had announced a merger way back in 1995, but the Indian operations have not concluded the formalities yet.

At the company's 72nd annual general meeting in Mumbai yesterday, Glaxo executives said the company is considering altering the articles of association to transfer shares only in marketable lots.

In the meeting, the shareholders approved several resolutions proposed by the company, including allowing buy-back of shares, hike in borrowing limit and permission to invest more than 30 per cent of its networth in other companies.

Glaxo had sought to hike its borrowing limit from Rs 125 crore to Rs 500 crore.

The company is also on the lookout for acquisitions and certain provisions which will enable them to quickly strike deals whenever opportunities arise, senior executives said.

The meeting also approved the induction of three new directors on the board -- G K Nair, M B Kapadia, and T Ray. These three were part of the company's managing committee.

The meeting was chaired by Deepak Parekh, chairman, Housing and Development Finance Corporation, (HDFC), who is also on the board of the company.

Glaxo announced that its sales jumped 16 per cent in the first five months of 1997, and the combined turnover of Glaxo and Burroughs Wellcome is expected to cross Rs 1,000 crore for the full year.

Glaxo, itself, is expected to attain sales growth of 21 per cent for the full year.

Khusrokhan said the qualigen business posted a 37 per cent growth, fine chemicals rose by 19 per cent and exports grew by 42 per cent. There has been a 19.6 per cent volume growth in pharma volumes in 1996.

Khusrokhan said the company is considering slimming down the Worli operations in Mumbai due to the high value of the real estate.

Nearly 300-400 employees are expected take up the voluntary retirement scheme (VRS) on offer at both Thane and Worli factories.

The cost of the voluntary retirement scheme is expected to be Rs 15 crore at an average cost of Rs 4.8 lakh per worker.

In 1996, the company spent Rs 80 lakh in an R&D centre at Thane to develop formulations for the export market.

Khusrokhan disclosed that the agrovet business has a 11 per cent market share, while the qualigens and fine chemicals possess a market share of 29 per cent.

FIIs buy 4.4%

Foreign institutional investors (FIIs) have picked up a 4.4 per cent stake in Glaxo India Ltd, which was nil last year.

Other changes in the shareholding pattern of the company include the UTI stake decreasing from 5.6 per cent to 4.6 per cent and LIC holding increasing from 5.1 per cent to 5.4 per cent. The shareholding of individuals has come down from 26.5 per cent to 24.7 per cent, while other companies have reduced their stake from 2.7 per cent to 1.1 per cent.