Our Bureau

Chennai, June 15

ORCHID Chemicals & Pharmaceuticals proposes to raise $100 million through an issue of Global Depository Receipts.

The company had earlier planned a `foreign currency convertible bond' issue for $75 million, but has now decided in favour of a GDR issue.

A spokesman of Orchid Chemicals told Business Line today that the company preferred raising funds through equity than debt, because it might then get better valuations.

The spokesman said that the funds could come into the company in "a couple of months".

He said that part of the funds would be used for retiring some of the relatively high cost debt and the other part for getting into multi-therapeutic areas non-anti-biotic drugs such as anti-diabetes.

"The physical infrastructure for producing them is already in place," the spokesman pointed out.

Orchid's associate company, Bexel Pharmaceuticals of the US, is the assignee of the intellectual property for the anti-diabetic molecule's (BLX-1002) discovery. The molecule has cleared Phase 2(a) clinical trials, which covers a limited proof-of-concept.

In addition to the GDR issue, Orchid Chemicals intends to issue 25 lakh warrants to the promoters, which are convertible into equity. An employee stock option plan is also on the cards.

To accommodate the GDR, convertible warrants and employees' options, the authorised capital of the company is sought to be raised to Rs 55 crore from Rs 45 crore now.

The annual general meeting of the company is to be held on July 18.

(This article was published in the Business Line print edition dated June 16, 2005)
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