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Saturday, Nov 30, 2002

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Nicholas Piramal board okays Global Bulk merger

Our Bureau

MUMBAI, Nov. 29

The board of Nicholas Piramal India Ltd has approved the merger of Global Bulk Drugs & Fine Chemicals (GBDFC) with NPIL, which will be effective from January 1, 2003.

According to a company release, the merger is being effected at a cost of Rs 52 crore (exclusive of net current assets of Rs 16 crore).

The release added that the merger of GBDFC with NPIL will create an immediate platform to build a strong exports business for NPIL in APIs, intermediates and formulations. NPIL hopes to achieve an exports turnover of Rs 100 crore in 2003-04 as against Rs 7 crore in 2001-02 and Rs 35 crore expected in 2002-03.

NPIL will not issue any equity shares to acquire GBDFC; for a consideration of Rs 68 crore, NPIL will issue six per cent non-convertible preference shares of Rs 15 crore redeemable in four years, and assume debt of Rs 53 crore standing in the books of GBDFC.

This acquisition will not only enhance earning per share (EPS) but will also help improve the return on net worth (RONW), the release said.

Enam Financial Consultants Pvt Ltd acted as advisors to the merger.

GBDFC plant has a USFDA approval for the entire facility without any deficiency or non-conformity and also holds accreditations and approvals from HC of UK, TGA of Australia, European Drug Authorities, Canadian Drug Authorities, ISO 14000 and 9001.

GDBFC's plant manufactures APIs, intermediates and formulations for export to the regulated markets and the company has existing relationships with pharma majors in the regulated markets, including Teva, Andrx Corporation, Ivax and Apotex in the generics segment and Sanofi-Synthelabo and Zambon in new drug delivery (NDD) segment. The company currently exports to the European and Canadian markets and is expected to export to the US later this financial year.

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