Nicco plans carve-out for biotech plans

Nicco group is planning to carve out a separate company from Nicco Corporation Ltd, the flagship of the group, for its bio technology venture.

The new company will be called Nicco Biotech Ltd, which is likely to be a joint venture between the group and a strategic investor. The group has initiated talks with investors in the US and UK for a possible tie-up. It is also planning to tap overseas and Indian venture capital funds for funding.

Incidentally, the group has signed memorandum of understanding with Bose institute on October 6 for the biotech venture in the presence of state industry minister Nirupam Sen.

Rajeev Kaul, the chairman, said, "We need Rs 4 crore in fresh capital for the project, out of a requirement of Rs 16.7 crore for the first phase of the biotech project. We shall raise Rs 4 crore as a combination of debt and equity."

"For the equity component some global and domestic venture capitalists have evinced interest. We are open to a strategic partner too," he added. The promoters have around 39 per cent stake in Nicco Corporation.

Kaul said distributors of Nicco Biotech products may also be allowed to pick up a stake in the company. "We may also approach the West Bengal Industrial Development Corporation for equity participation."

He said majority of the investment in Nicco Biotech would come from corporate debt restructuring route (CDR) in Nicco Corporation.

"Around Rs 12.7 crore would come from the CDR, for which we have already submitted a proposal to our lead bank. We are expecting a feedback by November," he added.