Suven Pharma May Sell 20% Stake To Foreign Partner

The promoters of the Rs 22 crore Hyderabad-based Suven Pharm-aceuticals Ltd (SPL) is negotiating with a foreign partner to pick up 20 per cent stake in the company. SPL plans to issue eight lakh equity shares, thereby increasing the equity base to Rs 4 crore.

After the allocation, the equity holding of the promoters will come down to 51 per cent from the current level of 63.75 per cent. Once the allotment is finalised, SPL will be benefited to the tune of Rs 30-35 crore.

Confirming the move, Venkateshwarulu Jasti, managing director, SPL, said they were negotiating the acquisition price and other nuances of the proposed alliance.

 

Expectations of the management of SPL for a better bargaining ground and its ability to ask for a premium to the current market price of Rs 28 stems from the fact that Suven Pharm-aceuticals has a strong R&D background which enabled it to develop cost efficient processes for some of the key intermediates in the pharma segment. Jasti attributes this as the major factor behind the keen interest showed by MNCs in SPL

SPL, which is mainly into production of pharmaceutical intermediaries like Cyano Acetic Acid, Methyl Cyano Acetate etc, is in talks with a new partner other than its three US partners in order to command a higher premium.

Company sources say the funds raised from the issue will be utilised to meet its expansion plans, and support the working capital needs of the existing and expanded capacities.

SPL has a five year co-operation agreement with Borregaard Synthesis Inc, US, for technical know-how, development, production and marketing of products in the overseas market.

SPL has also been approved by the US-based Abbott laboratories for the manufacture of raw materials for its products.

Last year, SPL entered into a marketing tie-up with Dupont for exporting Cyano Acetic acid in Nafta countries.