Cipla to set up manufacturing facility for pharmaceuticals in Iran

Cipla, through its Netherlands-based wholly-owned subsidiary Cipla Holding BV, has entered into an agreement with Ahran Tejarat Company to form a joint venture in Iran. As per the agreement, Cipla will hold 75 percent stake in the JV, while the Iranian partner will own the remaining. Cipla will invest approximately Euro 16.875 million (about Rs 120 crore) in the JV, which JV will set up a manufacturing facility for pharmaceutical products in Iran.

As per the agreement, Issat Company, an existing company in Iran and currently owned by Ahran Tejarat, is proposed to be used as the joint venture company for the purposes of this transaction. Issat Company has a valid pharmaceutical manufacturing licence in Iran and also owns certain fixed asset, but has not undertaken any business activity since incorporation in January 1998. Cipla Netherlands will initially acquire a 75 percent stake in Issat Company from the JV partner for Euro 1.35 million in cash and the balance amount of upto Euro 15.525 million is expected to be infused by Cipla Netherlands into Issat Company as equity over next one year period.

With this, Cipla announced that the company has terminated the earlier agreement signed by it with the JV partner in October 2014.