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Friday, April 07, 2000



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Reddy's Labs to hike equity base

C.R. Sukumar


DR. REDDY'S Laboratories Ltd (DRL) has decided to raise its authorised share capital to Rs. 50 crores from the existing Rs. 30 crores, keeping in view the proposed issue of American Depository Shares.

As against the current authorised share capital of Rs. 30 crores, the company's issued and subscribed share capital stands at Rs. 26.48 crores, comprising 2.64 crore equity shares of Rs. 10 each. The company proposes to add two crore equity shares of Rs. 10 each to its authorised share capital ranking pari passu in all respects with the existing equity shares.

DRL plans to issue equity shares and/or convertible securities and/or other instruments or securities by way of an offering denominated in foreign currency to the investors outside India.

According to DRL sources, ``The purpose of the international offer is to raise foreign exchange to finance research and development activities, investments in biotechnology and other high growth areas, including further acquisitions in India and abroad, domestic finished dosages, generics markets, expansion into new markets and also to meet the long-term working capital requirements.''

Sources said the DRL management has already had preliminary round of discussions with some of the international investment banks on the proposed global offer. Keeping this in view, the DRL board recently recommended a proposal to proceed with the interna tional offer.

``The detailed terms and conditions for the international offer will be determined in consultation with the international advisers and underwriters. Equity shares to be issued pursuant to this international offer will not exceed the aggregate of $200 mil lions, including premium.''

As the pricing of the offering could not be decided except at a later stage, DRL is currently not in a position to state the price or the exact number of securities or shares to be issued under the international offer. In view of this, the company propos es to place an enabling resolution in wide terms before its shareholders so as to obtain adequate flexibility and discretion to the DRL board to finalise the terms in consultation with the lead managers and underwriters later.

DRL is convening an extra-ordinary general meeting of its shareholders here on April 25 to obtain their consent for an enabling resolution with wide terms, sources added.

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