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Italian co picking up 10 pc stake in Elder Pharma

Our Bureau

Mumbai , Aug. 26

ANGELINI Acraf Spa, a privately held Italian company, is picking up a 10 per cent stake in the Mumbai-based Elder Pharmaceuticals Ltd.

Elder Pharma has informed the Bombay Stock Exchange that the board has approved allotment of 15,99,000 equity shares (10 per cent of the expanded share capital) of the company to Acraf Spa at a price of Rs 160 (inclusive of premium) per equity share.

The board has also approved allotment of up to 10 per cent of the issued share capital of the company to the employees of the company under a scheme titled "Elder ESOP 2004".

The funds received from the $ 5.5-million deal will be used for setting up a greenfield plant in Uttaranchal.

The Italian company's strength lies in pharmaceuticals and healthcare, said Mr Alok Saxena, Director International, Elder Pharmaceuticals.

According to Mr Saxena, the Italian company had been on the lookout for a strategic partner in the country and the two companies had been in talks for a long time.

Elder Pharma is already in a marketing tie-up with the $ 2-billion (euro 1.7 billion) Italian group for the marketing of Tantum, an NACID (non-steroid anti-inflammation drug).

"This is a win-win situation for both parties," said Mr Saxena.

As part of the alliance, the Italian company would be able to use Elder's facilities for outsourcing the manufacture of bulk drugs and formulations. It would also make use of Elder Pharma's R&D expertise in areas such as CNS, pain management and analgesia.

In turn, Elder Pharma would be able to access know-how from the Italian company to upgrade its own facilities.

The first phase of the green-field project, which is expected to cost between Rs 75 crore and Rs 100 crore, will be completed in October next year. The project is likely to be completed in 2006, Mr Saxena said.

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