Orchid gets nod for debt recast, sees growth momentum

Debt-ridden Orchid Chemicals & Pharmaceuticals has announced that the Corporate Debt Restructuring (CDR) cell has approved a debt restructuring package for the company. The company informed the stock exchanges that its board, which met late on Friday, has approved the CDR package.

As per the CDR scheme, the company has got approval for its decision to sell and transfer its penicillin and penems (including carbapenems) API business, together with its manufacturing facilities at Aurangabad and its associated research and development facility at Sholinganallur near Chennai, to US-based Hospira.

Orchid entered into an agreement with Hospira in 2012 to sell the above facilities for a consideration of $200 million (at that point of time). However, it could not complete the deal due to objections raised by banks and financial institutions, and finally referred it to CDR last year.

Also Read

Chef turned woman into ?200-a-night prostitute

Our world was hotter 1,000 years ago

Sunny Leone to be romanced by Ram Kapoor in ‘Patel Rap’

World’s fastest bowler: Morne Morkel at a humongous 173.9 kmph at IPL 2013, but Hawk-Eye was not looking

Some other features of the CDR package include repayment of (R681 crore) a portion of the total debt to lenders out of the sale proceeds and restructuring of the balance debt (R2,866 crore). The interest funding for the first two years from the

cut-off-date (April 1, 2013) for interest on term debts and one year for interest on working capital borrowings will be paid

by the company.

The company will have to carve out a portion of sale proceeds for meeting the working capital requirements. The restructured debt, together with funded loans, would have to be repaid over a period of eight years, starting April 2015, subject to regulatory approvals.

The restructuring process would be implemented by an appointed monitoring committee of CDR lenders.

Welcoming the CDR package, K Raghavendra Rao, chairman and managing director, Orchid, said: ?The approval of the CDR package would facilitate completion of the penicillin and carbapenem API business transfer to Hospira and also bring in working capital availability from the deal proceeds, besides de-leveraging the debt profile. With this the company would be on a better platform to achieve improved performance going forward.?