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Jubilant to demerge, list unit in Oct-Dec 2010

Jubilant to demerge, list unit in Oct-Dec 2010
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First Published: Tue, Mar 30 2010. 01 17 PM IST
Updated: Tue, Mar 30 2010. 01 17 PM IST
Mumbai: 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, said 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.”
The performance polymers and fertilisers business contributes about 10 % and 4% 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 Rs3.5 billion in FY11, Sankaraiah said.
The company has raised Rs3.87 billion through a QIP by selling 11.2 million shares at a price of Rs344.5 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 Rs6.5 billion, 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 pm shares in Jubilant Organosys were trading at Rs347.05, up 0.09% in a Mumbai market that was up 0.22%.
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First Published: Tue, Mar 30 2010. 01 17 PM IST