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Aurobindo Pharma in record share deal

Mumbai, Oct. 13: Billed as the largest private placement by any pharmaceutical company in India, Hyderabad-based Aurobindo Pharma will issue 38 lakh preferential shares at Rs 604 per share to net Rs 229.52 crore. The shares are being issued to Citicorp Banking Corporation (CBC), ChrysCapital and the company’s promoter P. V. Ramaprasad Reddy.

The shares of Aurobindo Pharma closed at Rs 691.55 on the Bombay Stock Exchange today.

Proceeds from the issue will be used to fund further research and development activities, potential acquisitions, working capital, repayment of high-cost debt and general corporate purposes.

“The induction of long-term partners such as CBC and Chryscap in addition to our existing partners — Templeton — will add immensely to the positioning of the company in the international market,” said chairman P. V. Ramaprasad Reddy.

CBC will be allotted up to 16.50 lakh equity shares, ChrysCapital LLC, Mauritius, will receive 9 lakh shares and Reddy will get 12.50 lakh shares.

Aurobindo Pharma added that CBC, Bahrain, is an investment vehicle for funds managed by CVC International, UK, and its investment will constitute up to 5.89 per cent of the company’s post-issue equity.

Similarly, ChrysCapital, which is a private equity fund, will hold up to 3.12 per cent of its post-issue equity. The promoter’s holding will rise to 28.93 per cent from 28.31 per cent.

However, the collective holding of promoters and persons acting in concert would reduce from 59.95 per cent to 56.28 per cent. According to the company, the price of Rs 604 is in accordance with Sebi guidelines for preferential issue considering the date 30 days prior to the date of the shareholder's meeting.

Following the preferential issue, the equity capital of the company will increase up to Rs 28 crore, over the existing capital base of Rs 24.2 crore.

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