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The board of directors at Morepen Laboratories Ltd on Wednesday approved the investment proposed by Corinth Group, a global private investment firm headquartered in Switzerland, to the extent of 100 million dollars (about Rs 750 crore).
The funds will be used in scaling up of Morepen's R&D facilities to meet significantly enhanced active pharmaceutical ingredient (API) demand with a market size of 40 billion dollars that Morepen has in the pipeline for the next three years. The company will set up a new US FDA standard API plant to meet the significant ramp up in scale and pipeline. Morepen will also establish a world-class facility for finished dosages as per US FDA standards at its pharma complex in Baddi, Himachal Pradesh, to cater to highly sophisticated and regulated markets like the United States and Japan. Besides, the funds will be used to set up diagnostics facilities including the manufacture of critical inputs/components/enzymes to meet regulated market standards, Morepen said in a statement. "India is seeing an exponential jump in household spend on point of care, home diagnostics, oxygen concentrators and other life-support systems with demand currently outstripping supply," it said. Following shareholder and regulatory approval, Corinth will be allotted 58.5 million new equity shares on preferential basis. This shareholding will equate to 9.41 per cent equity stake in the company on a fully expanded capital base. The balance 67.5 million dollars will be in the promoter group companies. The board of directors has also approved allotment of 50 million fresh equity Shares to the promoter group at a price determined by the Securities and Exchange Board of India (SEBI) pricing formula for preferential issuances in lieu of the 98.5 million unsubscribed warrants issued in the last financial year which lapsed due to technical reasons. While the new allotment will be at Rs 38 per share which will be 52 per cent higher than the earlier price of Rs 25 per for each warrant. After subscription of all the warrants, the promoter's stake in the company will go up to 44.28 per cent from 34.54 per cent on a fully diluted basis. Morepen is engaged in the manufacturing and sale of APIs, bulk drugs, home diagnostics, formulations and over-the-counter products. The company's manufacturing facility at Baddi in Himachal Pradesh comprises a scientifically integrated complex of 10 plants, each with a specific product profile. (ANI)
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