RPG Life Sciences to hive off subsidiary

RPG Life Sciences plans to spin off its subsidiary into a separate company. The pharma outfit of RPG Enterprises, which was formerly known as Searle India, has convened a board meeting on Tuesday to consider the proposal to separate its subsidiary, Instant Trading and Investment, from itself.

After the demerger proposal gets its board approval, it will be pursued under Sections 391-394 of the Companies Act, 1956, and will be subject to the consent of the members and creditors of the company as well as the Bombay High Court.

The proposed demerger follows a similar move by the group's tyre outfit, Ceat, which recently announced hiving off its investments into a separate entity.

Instant Trading and Investment has investments in equity and preference shares worth Rs 90 crore in a handful of the group's outfits namely RPG Transmission, CFL Financial, Ceat, Saregama India, Phillips Carbon Black, RPG Cables, CESC, Spencer, RPG Communications, Jubilee Investments and KEC International. Instant Trading and Investment's net worth is fully eroded.

The proposed move, experts said, would help RPG Life Sciences to focus more on its core activity "" pharma. Mayur Mehta, company secretary of RPG Life Sciences declined to comment.

RPG Life Sciences, which is into manufacturing and marketing of active pharmaceutical ingredients (API)s, pharmaceutical formulation and fermentation and biotechnology, started in 1968 as a joint venture with GD Searle of the US.

In 1993, GD Searle pulled out of the company by selling its equity interest to RPG Group. The group later rechristened the company as RPG Life Sciences. The company had a turnover of Rs 157 crore in 2005-06.

RPG Life Sciences divested its agrochemicals business in 2001 to focus on pharmaceuticals, fermentation and biotechnology.