Zenotech board to meet on July 17

Our Bureau

Hyderabad, July 10

Ranbaxy Laboratories Ltd (RLL) is all set to acquire a sizeable equity stake in Zenotech Laboratories Ltd (ZLL), the Hyderabad-based pharma company that is developing generic cancer drugs for the former to market in the US and Canadian markets.

The Zenotech board is scheduled to meet on July 17 to consider a proposal to issue equity shares in favour of Ranbaxy on a preferential offer basis.

Though the ZLL management is tight-lipped over the size and price of the preferential offer, sources told

Business Line

that the offer could result in Ranbaxy acquiring around 10 per cent equity stake in Zenotech.

Sources said the minimum price of Zenotech shares work out to around Rs 80 per share if the last six months average price on the bourses was calculated. Zenotech is likely to offer the equity at a significant premium to the minimum price, sources said, adding that it would enable the company raise Rs 20-30 crore.

Last month, Ranbaxy's wholly-owned subsidiary, Ranbaxy Pharmaceuticals Inc , had signed an agreement with Zenotech under which Zenotech would develop, submit for regulatory approval and manufacture a total of 11 oncology products to be co-marketed in the US and Canadian markets.

Apart from a proposal to consider preferential offer to Ranbaxy, the Zenotech board would also consider grant of options to directors and employees under Zenotech employee stock option scheme. In a communiqué to stock exchanges, Zenotech said its board would also consider allotment of shares to the erstwhile shareholders of Credence Pharmaceuticals Ltd and Hemarus Healthcare Pvt Ltd following the scheme of amalgamation entered between Credence Pharmaceuticals and Hemarus Healthcare, which was approved by the Andhra Pradesh High Court vide order dated May 2.

(This article was published in the Business Line print edition dated July 11, 2006)
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