Idl May Rope In New Partner For Pharma Venture

Hinduja group company IDL is weighing the option of roping in another equity partner in Astra-IDL, its pharma joint venture, if Astra sticks to its decision to pull out.

"We are looking at whatever it takes to grow. It is unlikely that any company will be willing to invest in research or technology without picking up a stake in exchange," said IDL sources.

They said talks are on with Astra to work out a settlement after the Swedish major said it is pulling out of the company. Most probably Astra will agree to the brands being licensed to IDL if it does finally sell its stake.

 

"The continued use of the products is one of the fundamental features of the negotiation.

It is certain that products will not be taken away from us as soon as the stake is sold off," they said. However, the exact period for which the products will be allowed to IDL has not been determined.

"Usually when licensing agreement are signed, they last for a period of 7 to 12 years. Astra's products will be gradually phased out over a period of time," sources added.

According to a shareholders' agreement, IDL has the first right to purchase the 25.85 per cent to be offloaded by Astra. Discussions are on to decide whether or not to do so.

IDL is also considering the possibility of restructuring its operations after the sell-out by Astra.

Astra's products constitute two-third of the product portfolio of Astra-IDL. Astra and IDL decided to part ways around three months back, the bone of contention being control of the company. Both hold 25.85 per cent each in the venture. However, sources ruled out the possibility of IDL getting out of the pharmaceutical business altogether. "That is for the moment not being considered."

In the meantime, at the annual general meeting of IDL held on September 14 at Hyderabad, K N Venkatasubramanian, retired chief executive officer of Indian Oil Corporation, took over as chairman of IDL Industries from PK Kaul. E G Mahadevan was assigned as vice-chairman, according to a press release issued by IDL