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Unimark Remedies Ltd’s lenders, led by ICICI Bank Ltd, have initiated the sale process of the debt-laden drug maker in an attempt to recover dues, according to two people familiar with the development.

“The sale process has been initiated recently and has seen interest from both strategic and financial investors. The bids will be invited in a couple of weeks," said one of the two people cited above, declining to be named.

Lenders to Unimark invoked the strategic debt restructuring (SDR) mechanism on 22 December to convert their loans into equity as part of the sale process. The process is currently on.

ICICI Bank Ltd, which has the largest exposure, has mandated ICICI Securities to find a buyer.

“The high levels of debt have pulled down the profit after tax to negative region, but it has managed to become EBITDA positive, although that number is low," the first person added.

EBITDA refers to the earnings before interest tax depreciation and ammortization.

In an email response, ICICI Bank, said it does not comment on client specific information.

Emails and calls to Unimark Remedies went unanswered.

In 2007, erstwhile global private equity fund Citi Venture Capital International (CVCI) had acquired 30% stake in the firm for 113 crore.

In 2013, the fund was bought by another New York-based fund The Rohatyn Group.

Emails sent to ICICI Securities and The Rohatyn Group on Wednesday evening remained unanswered.

The firm’s lenders had previously initiated debt restructuring at Unimark Remedies under the corporate debt restructuring (CDR) mechanism in September 2013, according to a Financial Express report dated 3 September 2013.

“The banks will own majority stake in the company once the SDR process is completed. It is expected to be completed before end of this month," said the second person mentioned above.

The SDR scheme, introduced by the Reserve Bank of India (RBI) in June 2015, allows banks to convert a part of a defaulting borrower’s debt into majority equity and assume operational control.

Under the original scheme, banks were given 18 months to find a buyer. In February, RBI reviewed these norms and said that at least 26% stake in the stressed asset must be sold within 18 months and the rest can be sold in tranches.

Gross bad loans across India’s 40 listed banks rose to 5.82 trillion at the end of the March 2016 quarter, up 93% from 3.02 trillion in the same period a year ago.

Net non-performing assets (NPAs) stood at 3.39 trillion, more than double the 1.68 trillion a year ago.

Unimark Remedies’s debt is close to 900 crore on a consolidated basis as of 31 March.

According to data available from the Registrar of Companies (RoC), Unimark reported revenue of 320.5 crore in financial year 2014-15, down from revenue of 436.1 crore in the previous year.

In 2014-15, the firm reported a loss of 84.7 crore as against a loss of 74.9 crore in the previous year.

“The way any acquirer would look at this asset is that due to the financial stress the capacity utilization of Unimark is not high enough as it does not have sufficient working capital. So for someone who acquires the asset, and puts the finances in place, there is an upside of ramping up the manufacturing facility and thus improving the numbers," the first person added.

Unimark Remedies sells affordable generic medicines in various therapeutic segments such as respiratory, cardiovascular, anti-infectives, central nervous system for global markets.

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