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Chennai-based pharma major Orchid Chemicals & Pharmaceuticals Ltd has reported a net loss of Rs 132.27 crore during the fourth quarter ended March 31, 2013 as compared to a profit of Rs 20.55 crore a year ago. The company attributed the drop due to working capital crunch, which impacted the production, and high interest costs.
Ch Ram, Head - Corporate Communications & Investor Relations, Orchid said on February 27, 2012 that the company has to pay back around $167 million (around Rs 850 crore) of FCCBs.
“Originally the pay back (of FCCBs) was suppose to happen through fund raising by diluting stake via QIP route. But the market condition was not good so we could not goahead with the fund raising plan,” he said.
Of the total $167 million, $90 million was funded through ECBs and the balance was funded through internal accrual and cash in hand, said Ram.
Commenting about interest rate, he said, the company is sitting on a debt of around Rs 2,400 crore. Interest costs rose by around 46% to Rs 85 crore in the fourth quarter from Rs 58 crore, a year ago. For 12 months, interest rates increased to Rs 304 crore from Rs 179 crore, an increase of around 70%.
The company hopes that it will come out from the cash crunch post the Hospira deal, which will bring around Rs 1,100 crore cash to Orchid. Of this, around Rs 1,000 crore will be paid to clear debt.
Commenting about the 45% drop in revenue during the fourth quarter to Rs 268.16 crore from Rs 490.78 crore, Ram said, lower production led to lower sales and lower revenue.
“To produce we need money, though the company has orders in hand for the next 6-8 months. At present company's manufacturing facilities runs at only around 60-65% capacity,” said Ram.
Commenting on the Business Transfer Agreement (BTA) entered with Hospira Inc, Ram said, the company is hopeful that the deal will be concluded before June 30, 2013. Originally, the deal should have happened before March 31, 2013.
It may be noted, in August 2012, the company announced that it has divested its penicillin and penem active pharmaceutical ingredience (API) business and the API facility to Hospira for a total cash consideration of around $202.5 million. However, it was delayed due to approvals.
