Orchid Chemicals and Pharmaceuticals today said the Corporate Debt Restructuring Empowered Group (CDR EG) has approved its debt restructuring proposal.
"... The CDR EG has issued the letter of approval dated March 10, 2014 and the Board of Directors of the company have approved the same today," the Chennai-based company said in a filing to the BSE.
As per the terms of debt restructuring, the company will sell and transfer its Penicillin and Penems (including Carbapenems) API business together with its manufacturing facilities at Aurangabad, Maharashtra and associated research and development facility at Sholinganallur, Chennai, it said.
From the sale proceeds, Orchid will repay part of its debt, amounting to Rs 681 crore, to the lenders, while rest of the debt (Rs 2,866 crore) will be restructured, the company said.
Part of the sale proceeds will also be used for meeting company's working capital requirements.
Moreover, the restructured debt together with funded loans would have to be repaid over 8 years starting from April 2015. This is subject to regulatory approvals, the company said.
Commenting on the development, Orchid Pharma's Chairman and Managing Director K Raghvendra Rao said, "The approval of CDR package would facilitate completion of Penicillin and Carbapenem API business transfer to Hospira and also bring in working capital... With this the company would be on a better platform to achieve improved performance going forward."
Orchid Pharma is a leading pharmaceutical firm, involved in the development, manufacture and marketing of diverse bulk actives, formulations and nutraceuticals. It exports its products in more than 75 countries.
