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Plethico Pharma gains 23.64% in two days after reaching settlement with Aurobindo

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Capital Market
Last Updated : Apr 11 2015 | 12:02 AM IST

Plethico Pharmaceuticals rose 3.06% at Rs 42.10 at 15:27 IST on BSE, with the stock extending Thursday's rally triggered by reaching settlement with Aurobindo Pharma.

Shares of Aurobindo Pharma were up 1.31% at Rs 1,341.80.

Meanwhile, the BSE Sensex was down 25.88 points, or 0.09%, to 28,859.33

On BSE, so far 3.24 lakh shares were traded in the Plethico Pharmaceuticals counter, compared with an average volume of 34,291 shares in the past one quarter.

The stock hit a high of Rs 44.50 and a low of Rs 41.40 so far during the day. The stock hit a 52-week high of Rs 74 on 12 June 2014. The stock hit a record low of Rs 24.65 on 27 March 2015.

The small-cap company has an equity capital of Rs 34.07 crore. Face value per share is Rs 10.

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Shares of Plethico Pharmaceuticals gained 23.64% in two trading days from a recent low of Rs 34.05 on 8 April 2015. The stock rose by its maximum permissible daily limit of 20% to settle at Rs 40.85 yesterday, 9 April 2015 after Aurobindo Pharma said that Plethico Pharmaceuticals, the Mumbai-based previous owner of Natrol Inc, has agreed to pay $23.30 million in cash in addition to certain global intellectual property (IP) rights and other assets to settle financial fraud accusations levelled by Aurobindo's US subsidiary. The announcement was made by Aurobindo Pharma before trading hours yesterday, 9 April 2015.

Aurobindo Pharma acquired US-based nutraceutical company Natrol Inc., formerly owned by Plethico group, for $132.50 million in November 2014 through a bidding process approved by the US bankruptcy court for the district of Delaware. The acquisition included manufacturing assets, personnel and commercial infrastructure etc., including Natrol's nutraceutical brands in US, along with an agreement to take certain liabilities with a bid of $132.50 million.

Aurobindo said in a filing that it has found certain discrepancies and non-performance of obligations by Natrol's erstwhile owner, Plethico. Aurobindo said it approached the Delaware bankruptcy court on Monday, 6 April 2015 against Plethico. Discussions were subsequently held between Natrol and Plethico group to resolve the issue.

Based on the discussions, a settlement agreement has been reached, wherein Plethico Group would assign $23.3 million in cash in milestone payments, certain global IP rights and other assets, Aurobindo Pharma said in a filing.

On a consolidated basis, Plethico Pharmaceuticals reported net loss of Rs 4.07 crore in Q3 December 2014 as against net profit of Rs 44.07 crore in Q3 December 2013. Net sales declined 70.28% to Rs 108.20 crore in the quarter ended 31 December 2014 over the quarter ended 31 December 2013.

Plethico Pharmaceuticals is a leading global healthcare / pharmaceutical company with a strong emphasis on the herbal and nutraceuticals segments.

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First Published: Apr 10 2015 | 3:27 PM IST

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