MUMBAI: India Resurgence Fund (IRF) led by Piramal Enterprises and Bain Capital Credit recently said it will invest Rs 992 crore in New Delhi-based pharma player Panacea Biotec which is facing a severe financial crisis.
According to recent media reports, the funds will be used for one-time settlement with the existing lenders, general working capital and growth requirements of Panacea Biotec
The joint venture fund has been active in the pharma business and the announcement comes after the February 26 announcement by Panacea about reaching a one-time settlement with the lenders to pay off Rs 864 crore of debt.
Medical Dialogues had earlier reported that with an objective of clearing its debt, Panacea Biotec moved to sell out its Gurgaon Hospital.
As per recent media reports, IRF said that the deal involves an investment of Rs 864 crore into a forthcoming non-convertible debenture issue, and Rs 32 crore towards subscription in share warrants to be allotted on a preferential basis.
Subject to the exercise of warrants, the fund and its affiliates will collectively own 10.4 per cent of the company on a fully diluted basis, it said.
The subscription amount represents 25 per cent of the total amount of Rs 128 crore proposed to be raised on issuances of equity shares against warrants as per Sebi rules, it added.
Fund’s managing director Shantanu Nalavadi said Panacea is embarking on a journey to enhance its market position as a strong and research-focused pharma and biotechnology company.
He further said the fund has invested to work closely with the promoters and management team to drive rapid revenue growth and sustainable profitability improvement.
“We look forward to leveraging their proven global expertise in restructuring and turn arounds and are certain that our combined efforts will now help accelerate our ambitious growth and profitability targets,” Panacea managing director Rajesh Jain said.
On February 26, Panacea had arrived at a one-time settlement with the lenders and at the extraordinary general meeting held on March 25, the shareholders had allowed the management to raise up to Rs 128 crore via issue of warrants on a preferential basis.
Panacea Drugs Pvt. Ltd. was set up in the year 1984 and got listed in 1995 as Panacea Biotec Ltd. Panacea Biotec is an Indian research-based pharmaceutical and health management company involved in research, manufacturing, and marketing of pharmaceutical formulations, vaccines, and natural products. It is one of the three largest biotech companies in India.