Cipla to pay $26-mn upfront for 51% in Ugandan firm

Drug major Cipla has re-negotiated payment terms for acquiring majority stake in Uganda's Quality Chemicals and decided to pay $26 million (Rs 166 crore) upfront to the shareholders of the firm.

Cipla (EU), a wholly-owned subsidiary of the company, has re-negotiated the terms of the agreement and have entered into an amendment for upfront payment of the consideration amount instead of payment in tranches over five years, the Mumbai-based company said.

"Accordingly, the revised consideration is around $26 million ($25,995,730) payable upfront upon completion of conditions precedent," it added.

In May, Cipla had inked a pact with Quality Chemicals to acquire majority stake in it for a total consideration of over $30 million (Rs 190 crore).

Cipla (EU) had entered into a definitive agreement to acquire a 51 per cent stake inQuality Chemicals Ltd (QCL) from its existing shareholders.

As per the agreement inked earlier, the cash consideration for 51 per cent stake was payable in tranches with around $8 million payable upfront on completion and 5 equal installments of $4.41 million payable at annual intervals thereafter.

QCL was incorporated in the year 1997 and is engaged in the business of import and distribution of pharmaceutical and consumer products.

Cipla shares today ended at Rs 678.30 apiece on the BSE, up 0.68 per cent from previous close.