Sun Pharma announces $225 mn FCCB issue

Sun Pharmaceutical Industries, which is eyeing acquisition opportunities in the US market, has decided to raise $225 million through foreign currency convertible bonds.

The five year zero coupon FCCBs are convertible at 50 per cent premium over the Wednesday's closing price, having a 4.61 per cent annum yield to maturity.

Sun Pharma now joins the list of prominent pharma companies such as Wockhardt and Shanta Biotech that had raised $100 million and $ 70 million, respectively through FCCBs.

These bonds are expected to be listed on the Singapore Stock Exchange. J P Morgan is the book runner and Jemyn Capital Partners Plc is the co-manager of the issue.

"The FCCB issue enables us to seriously look at acquisition opportunities in the US market," said Dilip Shanghvi, chairman and managing director, Sun Pharma in a statement issued on Thursday.

The company, engaged in manufacturing and marketing of specialty medicines and active pharmaceutical ingredients for chronic therapy areas such as cardiology, psychiatry, neurology, gastroenterology, is ranked fifth amongst all Indian pharma companies, as per the IMS-ORG Retail Store Audit, September 2004.

Sun Pharma currently ranks among the top 50 companies by market cap in India, and fourth by market cap among Indian pharma companies. The company currently has a market cap in excess of $540 million.

Initiatives in research have recently been strengthened, with an additional 250,000 square feet of research floor across two new sites. The total number scientists has been increased to around 400, and the has continuing commitments of $15 million to research and development for each of the next two years.

Sun Pharma participates in the US generic market through a subsidiary, Caraco Pharm Labs (Amex CPD), which markets 15 abbreviated new drug applications (ANDAs) and had reported a $44 million turnover for the first nine months up to September 2004. Sun Pharma has also recently begun filing for the US market from an Indian site, with seven filings made so far.

Sun Pharma has posted a 45.01 per cent rise in its consolidated net profit at Rs 358.9 crore in 2003-04 compared with Rs 247.5 crore in 2002-03. The company has posted 38.7 per cent growth in its profits at Rs 97.34 crore in the quarter ended September 30, 2004 as compared with Rs 70.18 crore in the quarter ended September 30, 2003.

Total income has increased from Rs 293.01 crore in the second quarter of 2003-04 to Rs 305.54 crore in the same quarter of the 2004-05 fiscal, a 4.28 per cent increase.