Teva to acquire 60% stake in Sol Pharma unit
By Julie Singh | 22 May 2002
As per the scheme, SPL will continue to hold the remaining 40 per cent in the joint venture. While all the other units four bulk drug units at Patancheru and Jeedimetla in Andhra Pradesh, two units in Bidar, Karnataka, and the formulation unit as well as the pilot plant at Nacheram will be retained by SPL.
SPL and Teva have signed a memorandum of understanding for the joint venture (JV) on 15 November 2000. The JV agreement with Teva will come into effect in three months time, bank officials close to the deal say.
The proposal to hive off the Patancheru unit is part of the Board for Industrial Finance and Reconstructions (BIFR) revised draft regulation scheme. BIFR had recommended splitting of the existing company into two firms.
An export-oriented unit, the Patancheru facility is valued by BIFR at Rs 32.20 crore. Teva has agreed to pay $4.2 million (Rs 19.22 crore) for the 60-per cent stake in the joint venture. Teva can now manufacture generic formulations intended for the US market in this facility at a competitive price.
SPL has been making losses since 1997. Its financial woes started with the international price crash of penicillin and on account of heavy dumping by China in the domestic market. Semi-synthetic penicillin accounted for nearly 30 per cent of its turnover in 1999. Besides penicillin, SPL has presence in anti-infectives, NSAIDs and central nervous system drugs.
