Strides Arcolab up 9% on foreign debt reduction

Strides Arcolab has soared 9.4% to Rs 523, extending its two day’s rally on the bourses on hopes that reduction of foreign debt would strengthen its balance sheet. The stock has rallied 35% so far in past three trading session is currently trading at its lifetime high level.

Commenting on the transaction, Arun Kumar, Executive Vice-chairman and Group CEO of Strides Arcolab, said, “The sale of Ascent is a value-enhancing and forward-looking initiative. The transaction further facilitates the execution of this strategy and unlocks significant value. Further, the proceeds from the transaction considerably strengthen our balance sheet.”

The mid-tier pharmaceutical company on Tuesday announced the sale of its subsidiary, Ascent Pharmahealth Ltd, with operations in Australia and Southeast Asia, to Australia-based Watson Pharmaceuticals for A$375 million (Rs 1,965 crore, approx), as the company plan to focus on high-margin injectables business.

 

The company may use the proceeds of this sale to pare its debt of $500 million in half by the end of 2012, including FCCBs of $117 million due by June 2012.

The trading volumes on the counter surged almost four-fold, with a combined 1.85 million shares have changed hands so far, against an average less than 500,000 shares that were traded daily in past ten trading days on the NSE and BSE.