Parvinder Singh To Divest 6% In Ranbaxy

Parvinder Singh and his family will dil-ute their equity stake in Ranbaxy Laboratories by 6 per cent primarily to red-uce the debt burden incurred by them to pay for warrants which were converted into equity more than 17 months ago. The sell-off, however, will not affect Singh's control over the company.

Singh, through his family investment firms, exercised an option in January 1996 to convert warrants into 80 lakh shares, and had forked out Rs 200 crore primarily through borrowings to pay for the shares.

The company has sought approval from the FIPB to privately place a maximum (it might actually place lesser shares) of 35 lakh shares of the company through Merril Lynch using a special purpose vehicle being set up overseas. The shares are held by various firms controlled by the Singh family.

 

The share capital of Ranbaxy, after Singh and the investment companies decided to exercise the option of converting the warrants into equity, is 494 lakh shares. The share capital of the company will expand to 578 lakh shares by December 5th this year-primarily because of conversion of outstanding warrants (which were issued during the company's rights issue in 1993) and issuing 3.28 lakh shares to the shareholders of Crosland after the merger goes through.

Sources said Singh and his investment firms were issued warrants with the option of it being converted into 80 lakh shares at Rs 400 per share. They said as the money was paid through borrowings taken at high rates, Singhs decided to liquidate their debt burden by partly selling their equity stake.