Saddled with a Rs 1,300-crore debt, drug maker Elder Pharma is looking to raise funds to tide over the situation.

The company has appointed advisors to look at different options towards this purpose and the process is expected to be completed in two months, a source familiar with the development told Business Line.

Fund-raising options

The options before the company include hiving off a business, selling brands or getting an equity partner. And the company’s board met recently to approve the restructuring of the company towards raising funds.

Elder Pharma’s shares were up over 4 per cent at Rs 368 on the BSE on Friday.

The company has a pipeline of prescription products in women's health, nutraceuticals and pain management. A flagship Elder product is Shelcal that had grossed Rs 200 crore in 2011.

The company also has a host of licensing partners, as many as 25 a couple of years ago — and Elder Pharma sells locally the products licensed in from these partners.

Mixed signals

In a move that sent conflicting signals to investors —- Elder Pharma had earlier this month acquired the UK-based Max Healthcare for an undisclosed sum. This had marked Elder’s entry into the over-the-counter business.

But the development took place even as the estimated Rs 1,400-crore Elder Pharma sought to fend off market speculation that it was putting its India business on the block.

In repeated disclosures to the stock exchange last month, the company had said that there was “no proposal of the promoters to sell the shares in the company’’.

'No conflicting signals'

The industry source also clarified that there was no conflicting signals, as the company was looking at hiving off parts and not the entire business.

In fact, in a detailed BSE disclosure late last month, Elder Pharma had said: “As informed earlier, at this stage the company does not have any definite proposals for the sale of its domestic formulations business. The company has been looking for opportunities of organic and inorganic growth/strategic restructuring/fund-raising activities, etc. so as to add value to the shareholders. We, as a company constantly work towards adding value to our shareholders and for growth of the company.”

Responding to a media report, the company had said: “We have not received any non-binding offers from counter parties.”

It further added: “the company will need to place any proposals received before its board of directors for their consideration. As and when the board approves any of the proposals, and there is more information for any potential transaction, which could have bearing on the operations/performance of the company or are price sensitive, we will inform the exchanges in accordance with the Listing Agreement.”

>jyothi.datta@thehindu.co.in

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