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Jubilant To Demerge, List Unit In Oct-Dec 2010

30 March, 2010

Drug-maker Jubilant Organosys Ltd plans to complete demerger of its performance polymers and fertilisers business and list the unit in quarter ending December 2010, a top official said.

Executive Director-Finance, R. Sankaraiah, told Reuters over phone the company would seek board approval for the demerger in May.

“We expect to get it (de-merger process) completed in the quarter beginning October,” he said.

The company plans to get the new unit listed on stock markets in the October-December quarter of FY11 itself.

“Shares of the new company would be issued to the existing shareholders of Jubilant Organosys,” he said. “The de-merged entity will have a mirror-shareholding pattern to that of Jubilant.” (VCCircle Adds – Private equity players General Atlantic, Henderson Private Equity and CVCI together hold a 16% stake in Jubilant).

The performance polymers and fertilisers business contributes about 10 percent and 4 percent of Jubilant’s total sales and net profit respectively, he stated.

“As of now it (polymers and fertilisers) is a combined entity (within Jubilant) and our entire investment goes only into pharmaceuticals business. So, these businesses are getting neglected,” he added.

“Hence, in order to pursue the growth of these two businesses independently, we want to put it in a separate company.”

QIP FUNDS

Jubilant Organosys would primarily utilise the amount it raised through a qualified institutional placement (QIP) to fund its capex plans worth 3.5 billion rupees in FY11, Sankaraiah said.

The company has raised 3.87 billion rupees through a QIP by selling 11.2 million shares at a price of 344.5 rupees a share, it said in a statement on Tuesday.

“We will first repay certain debt and other things. But primarily, the amount (raised via QIP) would be used for capital expenditure,” he said.

The company has a debt of 6.5 billion rupees, he added.

Jubilant’s plants running contract, research and manufacturing services (CRAMS) would see expansion in FY11, he added.

The company would invest in setting up a new vitamins business plant in an SEZ with a capacity of 10,000 tonnes per year, he said.

It also plans to expand its existing active pharmaceutical ingredients (APIs) plant, he added.

At 12:22 p.m. shares in Jubilant Organosys were trading at 347.05 rupees, up 0.09 percent in a Mumbai market that was up 0.22 percent.


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Jubilant To Demerge, List Unit In Oct-Dec 2010

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