Singapore: Drug maker Wockhardt Ltd that makes copies of Amgen Inc.’s Epogen for anaemia, hired ICICI Bank Ltd to arrange a loan of $150 million (Rs606 crore) to pay for the acquisition of France’s Negma Group.
The seven-year loan has an interest margin of 175 basis points more than the Euro Libor (London interbank offered rate), ICICI Bank said in a release on Monday. The three-month Euro Libor rate was fixed at 4.2%.
Mumbai-based Wockhardt is expanding overseas as increased local competition and government price controls weigh on earnings. Negma is Wockhardt’s fifth acquisition in Europe and the largest at $265 million, according to the company’s 16 May statement.
Wockhardt reported a profit of Rs66.3 crore in its first quarter ended March, turning from a loss of Rs3.7 crore a year earlier. The company follows the calendar year for accounting purposes.
The Indian government controls prices of 74 bulk drugs, or active ingredients, and their finished products, to make them affordable in a country where about 35% of the population of more than 1.1 billion earns less than $1 a day.
ICICI Bank got State Bank of India Ltd and CM-CIC Securities to join the loan before inviting other banks to take part in the borrowing, the statement said. Banks will be given a fee ranging from 65 to 85 basis points, depending on the amount they lend, ICICI said.
The acquisition of Negma will help Wockhardt gain access to the French generics market valued at $2 billion, according to the 16 May statement. Bloomberg