Mumbai: The medium-sized pharmaceutical company Ajanta Pharma Ltd has sought a financial assistance of $12 million (Rs 60 crore) from Europe-based banks and financial institutions (FIs) for working capital requirements of its three joint venture (JV) companies in CIS countries.
Ajanta's move is due to the new dollar convertibility restriction imposed by CIS countries. The central banks in these countries have put severe restriction in the area of converting their respective currencies into dollars. Besides, the quota system that prevailed in these countries has put limitations to the loans sanctioned to corporates.
Ajanta has three joint venture companies with respective governments in three CIS countries - Turkmenistan, Uzbekistan and Tajikistan. Till now, the company depended only on credits from these respective governments.
Says Ajanta Pharma chief financial officer Arvind K Agarwal: "We have sought financial assistance from European banks and FIs for the financial needs for our CIS operations. We are in advanced talks with a leading European bank, which is currently undergoing due diligence of our manufacturing facilities, and we have got a positive feedback that the finances will start flowing in by August 2002."
The Turkmenistan, Uzbekistan and Tajikistan JVs cover about 13 per cent of the total turnover of Ajanta Pharma. In the Uzbekistan JV, the company holds 51 per cent of the stake, with the balance owned by the government. In Turkmenistan, the company owns a 50:50 JV with the government. And in Tajikistan, Ajanta Pharma is a minority shareholder, owning 35 per cent of the stake, with the balance owned by the Tajik government.
The company is also planning to expand its operations to Kazakhstan and Kyrghiztan. "The project is under implementation. We will be forming JVs with the respective governments," says Agarwal.