Noida-based Jubilant Life Sciences Ltd (JLL) is transferring its pharmaceutical business to a wholly-owned Singapore-based subsidiary and plans to list it overseas in six-nine months.
As part of its restructuring, the company will transfer its active pharmaceutical ingredients (API) and dosage form businesses to a wholly owned subsidiary Jubilant Pharma Ltd, Singapore. This subsidiary will also control shares held by JLL in Jubilant Pharma Holding Inc (USA) and Jubilant Pharma NV (Belgium).
“This will enable the company to consolidate its API, solid dosage form, radiopharma, allergenic extracts, sterile injectables and ointment, cream and liquid businesses under Jubilant Pharma Ltd, Singapore and to explore, identify and implement the options and opportunities of raising money including by way of listing the Pharma business for its growth and reduction of overall consolidated debt of the company,” JLL informed the stock exchange.
The company’s spokesperson told VCCircle the firm has not decided on a location but the listing would be outside India and would be done in six-nine months.
“The transfer of these assets to its wholly owned subsidiary of Jubilant Pharma, Singapore will be for a consideration of Rs 1,145.10 crore subject to approval of the shareholders of the company,” JLL announced.
The development follows JLL’s earlier announcement four months ago that it plans to hive off its pharmaceutical and drug discover businesses as two separate subsidiaries and raise fresh capital from the pharma business to cut its debt.
This is not the first time that the firm is looking at such a demerger. In December 2010, the company, then known as Jubilant Organosys, demerged its agri & performance polymers business into an independent, listed company called Jubilant Industries Ltd. The demerged entity had a mirror shareholding pattern to begin with, but the promoters’ stake went up pursuant to a group restructuring that involved some privately held firms of the promoters.
That demerger left Jubilant Life Sciences as an integrated pharma and life sciences company. The firm is now one of the top custom research and manufacturing services (CRAMS) companies with Rs 5,161 crore and but low profit margin, having ended FY13 with net profit of Rs 152.7 crore. The company had debt of Rs 3,400 crore as of March 31, 2013.
Listing of the pharma business will make it the fifth firm of the Jubilant Bhartia Group to be listed on a stock exchange and the second to be listed overseas.
Besides Jubilant Life Sciences, the group has Jubilant Foodworks (Indian franchisee of Domino’s), Jubilant Industries and Jubilant Energy (listed on London’s AIM exchange). However, this list does not include the listed firms controlled by Shobhana Bhartia (wife of co-promoter Shyam Bhartia) who also happens to be part of the KK Birla Group, which has firms such as HT Media under its control.
(Edited by Joby Puthuparampil Johnson)