Piramal Health to buy back 20% shares for Rs 2,510 cr

Piramal Healthcare today said it will buy back 41.8 million shares, representing 20 per cent of the total number of shares, entailing a total outgo of Rs 2,510 crore.

The company's board has approved the proposal, which has been taken up subsequent to completion  of the sale of its domestic formulations business and its shareholding in Piramal Diagnostic Services, Piramal Healthcare said in a statement.

"The buyback will be done for a maximum of 41.8 million shares (representing 20 per cent of the total number of shares) at a price of Rs 600 per equity share," it said.

The buyback price represents a premium of 19 per cent over the average share price for the last three months and will entail a cash outflow of up to Rs 2,510 crore and will be completed by February 2011, it added.

 

The company said that its buy back offer would be done on a proportionate basis through the 'tender offer' route as prescribed under the Securities and Exchange Board of India.

Earlier in May this year, Piramal Healthcare sold its domestic formulation business to US-based Abbott Laboratories for $3.72 billion (about Rs 18,000 crore). It completed the sale in September and has received Rs 10,271 crore as initial consideration for the same.

Further, in June, 2010, Piramal Healthcare sold its shareholding in it's subsidiary - Piramal Diagnostic Services (PDSL) to Super Religare Laboratories for a consideration of Rs 600 crore. This deal was closed in August this year.

Meanwhile, the company today posted a consolidated net profit of Rs 12,540.44 crore for the second quarter ended September 30, 2010.

The company had a net profit of Rs 106.27 crore in the same period previous fiscal.

Due to the sale of business in the current quarter, the figures for the quarter and half year ended September 30, 2010 are not comparable to the previous quarter and half year figures.

Net sales of the company stood at Rs 752.01 crore in the second quarter ended September 30, while the same was Rs 999.99 crore in the same period corresponding fiscal.

"It is a normal quarter for us as most of the management time was focused mainly on closing this transaction and there were uncertainties in the employees mind and uncertainties in manufacturing and supply chain which to an extent affected the performance of our business," Piramal Group Chairman Ajay Piramal said.

Shares of Piramal Healthcare today closed at Rs 515.35 on the Bombay Stock Exchange, down 5.03 per cent from its previous close.