Dishman in $22 m securitisation deal

Dishman Pharmaceuticals and Chemicals Ltd has entered into a $22 million future flow securitisation that has been facilitated by Rabo India Finance, with participation from multilateral agencies FMO of Netherlands and DEG of Germany.

The three financial agencies have provided the loans against the Solvay Pharmaceuticals receivables, as Dishman has a long term contract up to 2013 to manufacture drugs for the Dutch-based Solvay Pharmaceuticals BV.

The Ahmedabad-based Dishman Pharmaceuticals will use the funds to finance its capacity expansion, research and development and other ambitious projects like acquisitions, that it is closely considering.

While FMO and DEG have sanctioned loans of 7.5 million euro each, Rabo India Finance has provided a loan of Rs 20 crore to the company.

To be repaid over a period of five years, the loan will attract an interest of less than 5 per cent. "The three agencies have given us the loans against the Solvay contract. Dishman will continue to receive money from Solvay, as the contract with the company is up to 2013, while the loans have to be repaid in five years," said Vikram Oza, vice-president, finance, of Dishman Pharma.

Dishman Pharmaceuticals and Chemicals (DPCL) officials said on Friday that the company was set to emerge as India's leading contract manufacturing organisation in the pharmaceutical industry, and besides manufacturing four products Solvay Pharmaceuticvals B V, Netherlands, with which it has a long term contract, it is in talks with at least five other huge pharmaceuticals companies of US, Europe and Asia for contract manufacturing.

"All our working capital has now been converted into loans with interest of about 3 per cent. Dishman is indeed happy to be associated with the multi national agencies for funding of its capacity expansion, research and development and acquisition plans," said DPCL managing director J R Vyas.

Wam Weink, head, regional department, India for FMO, Netherlands, said that FMO has already made investments worth 80 million euro in India and has lined up investments worth another 50-60 million euro in the coming months. "We are looking at the manufacturing sector, financial services sectors and other emerging fields for financing," he said.

Hubertus Pleister, director, DEG Office, New Delhi, said it was good to be associated with Dishman, as it already has a long-term contract with Solvay and is also emerging as a leader in contract manufacturing. DEG has investments worth Rs 120 crore in India and plans another Rs 50 crore by the end of the financial year.

While the company has an existing facility at Naroda in Ahmedabad and has constructed another facility at Bavla on the outskirts of the city, it has purchased a plot of land just besides the existing plot at Naroda.

While the new API and research and development facilities will come up at Bavla, the new plot at Naroda will have a export oriented unit that will manufacture quaternary ammonium and phosphorium compounds, which are raw materials for the disinfectants and pharmaceuticals industries.