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Orchid Chemicals and Pharmaceuticals Ltd (OCPL), which recently received nod for corporate debt restructuring (CDR), has created a blueprint to overcome the current crisis.
Addressing shareholders at the annual general meeting, K Raghavendra Rao, chairman and managing director, said the company’s addressable market size for the products under development in non-antibiotics segments was around $16 billion and the growth in the current non-antibiotics formulations business would come from timely filing and launches of products in the next 2-3 years.
This business with its new launches is expected to attain critical mass by FY 2018-19. “I am confident that Orchid will recoup its past glory, but it will take time. We have assimilated the learning of the past and created a blueprint, which, we are confident, will enable us reach our goal,” he said.
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It was also working towards expanding customer base in new geographies including establishment a strong footprint in the EU region. It would also look at strengthening presence in emerging markets, including Latin America and Asia Pacific, he said.
The company also see strength in alliances for its active pharmaceuticals ingredients (API) and formulations business.
Orchid was admitted for the CDR process in August 2013. The scheme includes sale of Orchid Pharma’s pencillin and penems API business together with its manufacturing facilities at Aurangabad, Maharashtra, and associated R&D facility at Sholinganallur, Chennai, for a cash consideration of about Rs 1,348 crore.
It also includes repayment of a portion (Rs 681 crore) of the total debt to lenders out of the sale proceeds and restructuring of the balance debt of Rs 2,866 crore. Around Rs 430 crore from the sale proceeds would be used for meeting the working capital requirements.
The restructured debt together with funded loans would have to be repaid over a period of eight years starting from April 2015, subject to regulatory approvals.
Answering a question of a shareholders, Rao said he had decided not to take salary as chairman considering the tough times.
The company expects the working capital to strength on the back of a Rs 1,500-crore topline it anticipates by utilising more of its existing capacity. The Alathur facility alone has a capacity of $200 million topline, said Rao.
