Hyderabad: The world’s largest producer of anti-ulcer drug Ranitidine Hcl, SMS Pharmaceuticals Ltd, plans to acquire Plant Organics Ltd, an ailing pharmaceutical company currently under Board for Industrial and Financial Reconstruction.
SMS Pharma’s board approved a plan to take over and revive the sick company and plans to submit a draft rehabilitation package to the board.
SMS shares rose 2.39% to close at Rs288.95 on the Bombay Stock Exchange.
SMS Pharmaceuticals had entered into a tie-up with the Plant in March for converting intermediates and other active pharmaceutical ingredients.
“We have decided to acquire (Plant) since it would add to our product range and manufacturing facilities, apart from substantial tax benefits,” says SMS Pharmaceuticals managing director Potluri Ramesh Babu.
The quantum of benefits will depend on the board’s calculation of accumulated losses and a rehabilitation package.
SMS, which is into manufacturing active pharmaceutical ingredients and intermediates, has four manufacturing facilities, including a US Food and Drug Administration-approved plant.
Plant, a listed company promoted by pharma industrialist V. Ramakrishna Rao in 1983, later turned sick with accumulated losses of over Rs20 crore on a paid-up equity of around Rs65 lakh.