The Madras High Court has issued an injunction against IDBI Bank from taking any steps relating to the conversion of its lending to Orchid Chemicals and Pharmaceuticals Ltd into equity, for a limited period.
The decision, taken recently, relates to a dispute after IDBI Bank issued a notice to convert a part of its loan to equity in Orchid Pharma, which led both the parties resorting to court proceedings.
According to earlier reports, the proposed deal of Orchid Pharma to sell its manufacturing facility in Maharashtra and related R&D in Chennai to US-based Hospira Inc, for a consideration of $200 million, now depends on the court verdict or a settlement of the dispute, since the bank wants the company to meet the conditions stated in its loan agreement before selling the business.
According to the report, IDBI has lent Rs 300 crore to the pharmaceutical firm.