Morepen Laboratories said on April 28 that its board of directors approved an investment of $32.50 million from Switzerland-based Corinth Group as part of the private investment firm's proposed $100 million investment in the Morepen Group.
The investment is subject to the approval of shareholders and other regulatory bodies.
Corinth would be allotted 58.50 million new equity shares on a preferential basis. This shareholding would amount to a 9.41 percent equity stake in the company on a fully expanded capital base. The remaining $67.50 million would be in the promoter group companies.
“We are delighted to partner with the well-respected institution, Corinth Group of Switzerland, who have a dedicated fund for emerging markets, more particularly India market and healthcare. The Rs 750-crore investment by Corinth in the Morepen Group affirms our leadership position in API, Point of Care Diagnostics and OTC and the faith global
investors have in our growth potential and future," Morepen Labs Ltd Chairman and Managing Director Sushil Suri said.
The board 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 98.50 million unsubscribed warrants issued in the last financial year that lapsed due to technical reasons.
The new allotment would be at Rs 38 per share, which will be 52 percent higher than the earlier price of Rs 25 per for each warrant. After the subscription of all the warrants, the promoter’s stake in the company would go up to 44.28 percent from 34.54 percent on a fully diluted basis.
The funds would be used in the expansion and scaling up of the company’s R&D centre and facilities to meet the significantly enhanced Active Pharmaceutical Ingredient (API) demand, addressing a market size of $40 billion, that Morepen has in the pipeline for the next three years. The funding will be used to set up a new USFDA standard API plant to meet the significant ramp up in scale and pipeline and on establishing a world-class facility for finished dosages as per the US drug regulators' standards at Morepen’s pharma complex in Baddi, Himachal Pradesh, to cater to highly regulated markets such as the US and Japan, it said.
A part of the investment will also go into world-class diagnostics facilities, including the manufacture of critical inputs, components and enzymes to meet regulated market standards and also expand personal care brand.