Divestment of US subsidiary to leave Aurobindo Pharma cash positive

Divestment of the US subsidiary is at good valuations and will help attain net cash positive status

Aurobindo Pharma may have consistently impressed on the growth front, but it is among the few Indian pharmaceutical majors to have a stretched balance sheet. The drugmaker’s announcement of divestment of a US subsidiary should address this concern, given it will wipe off more than 80 per cent of its gross debt.

Aurobindo has reached a definitive agreement for the sale of Natrol LLC. This will fetch it $550 million (Rs 4,048 crore) on deal completion. Aurobindo had a net debt of Rs 1,445 crore ($191.3 million) and gross debt of Rs 4,777 crore at the end of the April-June quarter.