A leading pharmaceutical company has announced the sale of its formulations manufacturing facility located at T-139, MIDC, Tarapur, Palghar – 401506, for a consideration of Rs. 36.90 crore on a slump sale basis. The sale is subject to necessary regulatory approvals and is expected to be completed on or before June 30, 2025.

No Business Impact from the Sale

Despite selling this manufacturing unit, the company has assured stakeholders that there will be no impact on its business operations, as the products currently manufactured at the Tarapur facility will be shifted to other existing manufacturing units.

The company had acquired the Tarapur unit in 2014 for Rs. 38.61 crore, and as per its books, the net written down value of the facility currently stands at Rs. 37.31 crore.

Buyer Details & Transaction Structure

The buyer of the Tarapur manufacturing facility is M/s. V S International Pvt Ltd, a company engaged in the development, manufacturing, distribution, and sale of pharmaceuticals. It is important to note that V S International Pvt Ltd does not belong to the promoter or promoter group and is not a related party. The transaction is being carried out at arm’s length.

Strategic Rationale Behind the Sale

The company is streamlining its manufacturing operations by reducing the number of smaller facilities and optimizing resources. This move is expected to help in cutting administrative and operational costs, aligning with the company’s broader cost-efficiency initiatives.

Key Financial Details

• Consideration for the sale: Rs. 36.90 crore, payable in cash

• Original purchase price: Rs. 38.61 crore in 2014

• Current net book value: Rs. 37.31 crore

• Transaction structure: Slump sale basis

• Expected completion date: On or before June 30, 2025

Advisory & Compliance

Ernst & Young LLP has acted as the exclusive advisor for this transaction. Since the transaction is outside any Scheme of Arrangement, compliance with Regulation 37A of the LODR Regulations is not applicable.

No Change in Shareholding Pattern

The sale of this manufacturing facility will not impact the shareholding pattern of the company, ensuring continuity for shareholders.

Conclusion

This strategic move marks an important step in the company’s ongoing business optimization efforts. By consolidating its manufacturing operations, the company aims to improve overall efficiency and cost-effectiveness in its pharmaceutical production.

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