The Hindu Business Line : Strides Arcolab board nod to raise $40 m thru FCCB

THE board of directors of Strides Arcolab has approved a proposal to issue foreign currency convertible bonds or similar securities for up to $40 million (over Rs 175 crore).

The amount raised through the route will finance the company's expansion plans. The MD or Executive Director of the company has been authorised to finalise the size of the issue, the terms and conditions. An EGM will be called to approve the move, according to the company's intimation to the BSE.

Strides expects to finalise its merchant banker for the issue in six to eight weeks, Mr K.R. Ravi Shankar, CEO-India, said. The company's various overseas supply arrangements warrant nearly a doubling of its capacity.

Strides has applied for about 10 acres of land in Bangalore for new facilities, Mr Ravi Shankar told Business Line.

The company, a generics and nutraceuticals export major, is in supply arrangements with Australian pharma group, Mayne, for anti-infectives to the US and European markets, besides a clutch of overseas pharma players.

It has formed a 50:50 joint venture with the US hospitals major, Akorn, with a plan to launch 20 generic products in that country in the next couple of years.

The filings for these and related development activities would begin this year if the regulatory approvals are to come by 2006-07, "by which time we have to be ready with our capacity," he said.

The company, meanwhile, has issued 11,96,662 equity shares to its Latin American partner, Elcemar Almeida & Associates, at a price of Rs 200 each. The allottees on behalf of Elcemar are Goodlanza SA, Uruguay, and Zenox Ltd, British Virgin Islands. In October last year, Strides raised its stake in the Brazilian and Mexican venture with Elcemar to 52.5 per cent; and in return offered it some 4 per cent stake in Strides.

As an anti-dilutive step, 18,35,826 warrants have been issued to Group CEO Mr Arun Kumar, Mr Ravi Shankar (at 8.08 lakh warrants each) and Agnus Holdings P Ltd.

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