JK Drugs & Pharmaceuticals (JKDPL), which is set to be spun off from JK Industries, is raising Rs 30 crore through private placement of preference shares and fully convertible debentures with JK Industries.
JKDPL will become a separate company once the JK Industries' shareholders approve the proposed hive off at June 14 meeting. The new company will have an equity base of Rs 20 crore, with one lakh shares being placed with JK Industries at a face value of Rs 10 per share and a premium of Rs 10.
Besides, it will place 12 per cent redeemable cumulative preference shares of Rs 100 each amounting to Rs 20 crore, and zero-coupon fully convertible debentures of Rs 1,000 each worth Rs 10 crore with its promoters. It will raise another Rs 50 crore from institutions and banks.
The preference shares will be converted into five fully paid-up equity shares of Rs 10 each at a premium of Rs 10 per share. The zero-coupon FCDs will be converted into 100 fully paid-up equity shares of Rs 10 each after the expire of 36 months and before 60 months from the date of allotment.
JK Industries decided to spin off the pharma division into a separate, 100 per cent owned company called JKDPL. JK Industries has shaped the company to act as a vehicle for joint ventures in the pharmaceutical sector. The demerger will be effective from July 1, 1996.
While declining to name the likely partners in the joint venture, company officials said at a press conference in Mumbai that they were looking for equity participation by domestic or foreign partner.
The president of the pharmaceuticals division, VK Batra, said JK is in talks with some companies and would finalise a joint venture soon. He said the company would expand its exports to 30 countries by the end of this year.
ar. Besides the 16 countries where the company already has a presence, it will target the Latin American and African markets, he said.
The bulk drug and formulations plant at Gajraula in Uttar Pradesh and the research and development (R&D) centre at Faridabad in Haryana are being transferred from JK Industries to JKDPL.
Batra said the company will build a 280-strong workforce and a field force comprising 250 personnel in the pharma business for the new venture. While saying there was no immediate plans for the merger of another JK group company, JK Pharmachem, with JKDPL, Batra said this could be considered in the future.
JK Industries corporate vice president (finance) A K Kinra said the pharmaceutical business has been valued at Rs 100 crore and that the de-merger was done as the two businesses of JK Industries -- tyres and pharmaceuticals -- were unrelated.
