JB Chemicals & Pharmaceuticals is likely to give a special dividend of Rs 35-40 a share to its shareholders from the sale proceeds of its Over-the-Counter (OTC) business in Russia and Commonwealth of Independent States (CIS) countries, according to the sources.
The Mumbai-based drugmaker last week received Rs 738 crore and an agreed portion of the consideration in escrow account after completing sale of its OTC business in Russia and CIS counties to Johnson and Johnson’s (J&J) unit Cilag GmbH International. The company’s Russian subsidiary received $35 million from the sale of OTC inventory and receivable to J&J LLC.
JB Chemicals board will meet next month to decide on the exact quantum of the special dividend, a senior company official said on condition of anonymity. An email query sent to Pranabh Mody, president of JB Chemicals, on the company’s plans to give special dividend remained unanswered.
Shares of JB Chemicals fell 3.74 per cent to Rs 139.10 on the Bombay Stock Exchange (BSE) yesterday. The company’s stock has fallen about 14 per cent since the news of its plans to sell its OTC business in Russia and CIS countries became public on April 22. For the financial year ending March 31, JB Chemicals had paid a dividend of Rs 2 a share to its shareholders.
Prior to the deal, Russia and CIS countries contributed 50 per cent of JB Chemicals’ business, while its domestic business contributed 30 per cent and rest of the world accounting for about 20 per cent. The drug maker plans to strengthen its Indian product basket by in-licensing the global brands in therapeutic areas of cardiovascular, orthopedics and gastroenterology.
Strengthening its domestic presence, JB Chemicals is setting up gynaecology and dental care divisions by hiring 100 sales representatives soon. The company will invest Rs 30-40 crore to set up a new plant to tap the growing need for contract manufacturing. It plans to operate its lozenges manufacturing plant at Daman and injectable making plant at Panoli at full capacity, which are used at 70-80 per cent of capacity at present.