Dishman Pharma to issue $50 m FCCBs

Ahmedabad-based Dishman Pharmaceuticals and Chemicals Ltd (DPCL) has decided to issue unsecured foreign currency convertible bonds (FCCBs) of up to $50 million.

The fund raised will be used to swap off external commercial borrowings (ECB) and to expand the capacity of the company's manufacturing facility at Bavla on the outskirts of Ahmedabad.

The FCCB will be raised in June.

Company officials said here that $25 million will be spent in expanding the capacity of the Bavla unit, while the remaining $25 million will be spent in swapping off the loans of FMO and DEG, which had provided future flow securitisation.

While FMO and DEG have sanctioned loans of 7.5 million euro each, Rabo India Finance has provided a loan of Rs 20 crore to the company. To be repaid over a period of five years, the loan will attract an interest of less than five per cent.

"The FCCBs will get attract an interest of 0.5 per cent to one per cent, which is far better suited for the company's interests," said Vikram Oza, vice-president, finance, DPCL.

Earlier, DPCL had secured a $22 million future flow securitisation that had been facilitated by Rabo India Finance, with participation from multilateral agencies FMO of Netherlands and DEG of Germany.

The three financial agencies provided the loans against the Solvay Pharmaceuticals receivables, even as Dishman has a long term contract upto 2013, under which it will manufacture drugs for Dutch based Solvay Pharmaceuticals BV.

The total income of the company for the third quarter ending December 31, 2004, stood at Rs 44.25 crore as compared with Rs 33.42 crore for the corresponding period in the previous year.

The net profit of the company for the third quarter was Rs 8.78 crore as compared with a net profit of Rs 3.77 crore for the corresponding period last year, a rise of 133 per cent.