Morepen Labs to raise over Rs 433 cr via issuance of shares on preferential basis

Drug firm Morepen Laboratories on Wednesday said its board has approved raising over Rs 433 crore through issue of shares to Switzerland's private venture capital firm Corinth Investment Holdings and Liquid Holdings, a promoter group of the company, on a preferential basis.

''The board of directors of the company considered and approved issue and allotment of up to 10.85 crore equity shares on a preferential basis,'' Morepen Laboratories said in a regulatory filing.

In a separate filing, Morepen Laboratories said the Morepen Group has sealed a total investment of USD 100 million (about Rs 750 crore) from Corinth Group.

Morepen Laboratories' board has approved issue of up to 5 crore equity shares to Liquid Holdings, an entity belonging to the promoter group of the company, at a price of Rs 38 per equity shares, for an aggregate amount of up to Rs 190 crore.

Morepen Laboratories' board also approved issue of up to 5.85 crore equity shares to Corinth Investment Holdings AG, a Switzerland based entity, that belongs to the public category. The issue will be at Rs 41.60 per equity shares, at a premium of 10 per cent for an aggregate amount up to Rs 243.36 crore.

The company said an extraordinary general meeting of the members of the company will be held on May 20, 2021, for seeking approval of the members for the said preferential issue.

Morepen Laboratories said its board approved the investment proposed by Corinth Group to the extent of USD 32.50 million (about Rs 243.36 crore) in the parent company Morepen Laboratories Ltd, out of a total USD 100 million investment in the promoter group, subject to approval of the shareholders and other regulatory bodies.

Following shareholder and regulatory approval, Morepen Laboratories said Corinth would be allotted 5.85 crore new equity shares on a preferential basis. This shareholding would equate to 9.41 per cent equity stake in the company on a fully expanded capital base.

The balance USD 67.50 million would be in the promoter group companies.

The board of directors has also approved an allotment of 5 crore fresh equity shares to the promoter group in lieu of the 9.85 crore unsubscribed warrants issued in the last financial year which lapsed due to technical reasons.

The company said total fund infusion in Morepen Laboratories, including investor funds and promoter's equity, will be Rs 565 crore.

The funds would be used in expansion or scaling up of the company's R&D centre/facilities to meet the significantly enhanced active pharmaceutical ingredient (API) demand.

It will also be utilised for setting up new API plant to meet the significant ramp-up in scale and pipeline the company is working on. The firm will also use the funds, among other purposes, to establish a facility for finished dosages as per USFDA standards at Morepen's pharma complex in Baddi, Himachal Pradesh to cater to highly sophisticated/regulated markets such as the US and Japan.

''The Rs 750 crore investment by Corinth in the Morepen Group affirms our leadership position in API, point of care, diagnostics and OTC (over the counter) and the faith global investors have in our growth potential and future,'' Sushil Suri, chairman and managing director of Morepen Labs, said.

He added that Corinth is also investing with the firm in the multi-speciality hospital and its emerging online generics business that will allow it to scale up the back-end and front-end technology and supply chains.

''The investment into Morepen follows from our increased focus on emerging markets, and in particular the health and pharmaceutical industry.

''India is a key global market with significant growth opportunity, and we look forward to working with management to help the business develop while catering to a rapidly growing sector,'' Christopher Pissarides, chairman of Corinth Group's advisory board and Nobel Prize laureate (2010) in Economics, said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)