By 29 June, 2010

Alembic Limited has decided to de-merge its core pharmaceutical business into a 100% subsidiary company called Alembic Pharma Limited. As per the scheme of arrangement, the company proposes to de-merge its domestic formulation, international generic and API business to its subsidiary company, Alembic Pharma Limited.

After the de-merger becomes effective, Alembic Limited will continue to be listed and an application will be made to BSE and NSE to list Alembic Pharma Ltd.

The de-merger will allow the two companies to focus on their respective core businesses. Alembic Pharma Limited will become a pure pharma player with focus on domestic formulation business and international business largely driven by the regulated markets and research & development activities.

Alembic Limited will retain its Vadodara manufacturing facility, which has fermentation facilities manufacturing Penicillin G & Erythromycin Thiocyanate and other products along with the power infrastructure and the land assets at Vadodara.

This re-organisation exercise will help unlock shareholders value and also help insulate core pharma operations from severe volatility and uncertainty of Pen G business of Vadodara manufacturing facility, said the statement.

Under the demerger scheme, the shareholders of Alembic Limited will be issued one equity share having face value of Rs 2 each in Alembic Pharma Ltd (APL) for every one equity share having face value of RsĀ  2 each held by them in the company. This will be in addition to the equity shares already held by the shareholders in Alembic Limited. Post de-merger, the equity share capital of Alembic Pharma Limited will be Rs 37.70 crore of which Alembic Limited will hold 29.18% and the balance will be held by shareholders of Alembic Limited, the statement added.

Alembic Limited will continue to operate the Vadodara undertaking (including power generating and other utilities) whose products are largely commoditized and face competition from Chinese companies. In future, Alembic Limited will also endeavour to develop its real estate into commercial and residential properties subject to necessary approvals.

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