The Hindu Business Line : Indoco plans to merge pharma operations

Mumbai June 19 Indoco's wholly owned subsidiary La Nova Chem (India) Pvt Ltd will merge with the company, after shareholders recently approved its composite merger and demerger scheme.

Also, the pharmaceutical division of SPA Pharmaceuticals will be demerged and merged with Indoco Remedies Ltd, a company release said.

The scheme awaits approval from the Bombay High Court.

Ms Aditi Kare Panandikar, Director (Business Development), Indoco, told Business Line that Indoco had a loan-licence agreement with SPA Pharmaceuticals and this seemed to be a problem while getting regulatory approvals in different markets.

The manufacturing licence needs to be in the name of the company, as a result of which Indoco has taken on the people and manufacturing facilities from SPA into its fold to benefit from the synergy, she said.

SPA's formulation plant at Aurangabad also has several approvals, she added. The company has a bulk-drug plant in Navi Mumbai.

Meanwhile, SPA will take care of the non-pharma activities, including financial services, she said.

SPA Pharma is the largest shareholder in Indoco, she added.

When the scheme becomes effective, shareholders of SPA Pharmaceuticals will be entitled for three equity shares in Indoco Remedies for every four held by them.

The composite scheme has been devised to achieve synergy in terms of administration costs and flexibility of operations, the release said.

Stakeholders would benefit by having a larger asset base and increased capacities with scope for future expansion, it added.

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