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Exchange Disseminated Time | Kilitch Drugs India Ltd has informed BSE that:
"1. The Company's business includes research, development, manufacturing, marketing, importing and exporting of generic pharmaceutical formulation products inter-alia out of two factory units of the Company situated at Village Nihalgarh, Tehsil Paonta Sahib, Himachal Pradesh ("Business"). The board of directors of the Company, at its meeting held on October 06, 2011, has approved the slump sale of the Business to Akorn, Inc., which will acquire the Business through a wholly owned subsidiary incorporated in India ("Akorn"). For this purpose, the board of directors of the Company have also approved a Business Transfer Agreement ("BTA") inter-alia with Akorn.
2. In terms of the BTA, the Business shall be transferred to Akorn as a going concern on slump sale basis for an aggregate consideration of Rs. 188 Crores. The consideration payable for the Business is subject to certain adjustments including on account of working capital and capital expenditure. The transfer of the Business to Akorn includes transfer of the Company's manufacturing facilities at Paonta Sahib, certain trademarks and brandnames, movable properties, employees, sundry assets and liabilities forming part of the working capital of the Company pertaining to the Business but excluding cash and cash equivalents and any indebtedness pertaining to the Business. As part of the BTA, the Company has also provided certain representations, warranties and indemnities to Akorn. The Company will also be providing a royalty-free license to Akron to use certain common trademarks for the Business. In terms of BTA, the Company has agreed to certain non-compete and non-solicitation obligations for a period of four years. Also, as part of the BTA, the Company proposes to enter into a Management Services and Transition Support Agreement with Akorn whereby the Company shall provide certain transition and management services to Morn for an additional consideration of Rs. 32.50 lacs to facilitate transition of the Business from the Company to Akorn.
3. The Company also manufactures certain hormonal and cephalosporin pharmaceutical formulations at its Navi Mumbai facility situated at C-301/2, TTC Industrial Area, MIDC, Pawane, Navi Mumbai - 400 705 which the Company was planning to transfer to its Paonta Sahib Plant. The board of directors of the Company have also approved transfer of the said business of manufacture of hormonal and cephalosporin pharmaceutical formulations currently undertaken at the Navi Mumbai facility to Akorn for an additional consideration of Rs. 11.75 Crores, subject to working capital adjustments. The board of directors of the Company have approved a Product Transfer Agreement inter-alia with Akorn in this regard ("Mumbai Product Transfer Agreement"). Simultaneously, NBZ Pharma Ltd, one of the Promoters of the Company has also agreed to transfer a part of its business of manufacture of certain pharmaceutical products to Akorn for a consideration of Rs. 34.46 Crores.
4. The transactions contemplated in the BTA and the Mumbai Product Transfer Agreement are subject to certain conditions precedent including approval of the shareholders of the Company which will be sought by way of a postal ballot.
5. The Company shall continue to carry on and expand the business of sales, marketing and distribution of eye care products, manufacturing from its Navi Mumbai facility and export of generic formulation products to certain overseas markets. The Company will also enter into certain agreements with Akorn for manufacture of products on contract manufacturing basis for Akorn.
6. As part of the transactions contemplated in the BTA, the Promoters of the Company have undertaken not to compete with the Business transferred to Akorn for a period of four years for a consideration of Rs. 20 Crores to be paid by Akorn. Further, Akorn proposes to engage the services of certain Promoters of the Company for the (a) expansion of an additional manufacturing unit and facility at the Paonta Sahib Plant for Akorn; (b) upgradation of the regulatory and quality standards of the manufacturing unit at Paonta Sahib; and (c) management of the day to day operations of the Business for a period of one year from the date of consummation of the transactions contemplated in the BTA. The said Promoters may be paid a potential consideration of upto Rs. 30 Crores for these services which payment is contingent upon achievement of certain milestones.
7. The Company will be taking consent of the shareholders of the Company regarding sale of its undertakings pursuant to Section 293(1)(a) read with Section 192A of the Companies Act, 1956. Notice of the shareholders' postal ballot, draft resolutions and an explanatory statement will be sent to the shareholders in due course." |
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