Transaction to be completed in 4th quarter of FY 2015-16
Cipla announced that the Board of Directors of Cipla have on 10 December 2015, approved the transfer of the consumer healthcare business of the Company to Cipla Health on a going concern basis by way of a slump sale for a lumpsum consideration of Rs. 16 crore.Cipla Health is a newly incorporated subsidiary of the Company and was incorporated on 27 August 2015. It will focus its business activities in the consumer healthcare space.
The consumer healthcare business to be transferred to Cipla Health includes the scope of the business as approved on 09 July 2015, along with certain additional business. The amount and percentage of the turnover contributed by the consumer healthcare business of the Company for the financial year 2014-15 was Rs. 54.28 crore and approx. 0.48% respectively. The net worth of consumer healthcare business of the Company as on 31 March 2015 was Rs. 7.88 crore contributing 0.07% of the net worth of the Company.
The transaction will enable the Company to participate in the attractive and growing over-the-counter market. This business requires a specialised FMCG kind of focus, and a separate subsidiary would enable the Company to attract the right talent and provide the focus and attention required for this business. Nevertheless, being a subsidiary of the Company, Cipla Health will continue to take advantage of the Company's leadership in the Indian healthcare market.
Pursuant to the Board approval, the business transfer agreement is in the process of being finalised. The transaction is expected to be completed within the fourth quarter of the financial year 2015-2016, subject to the execution of the agreement and completion of certain conditions precedent.
None of the persons belonging to Promoter/Promoter Group(s) of the Company has any interest in the transaction. The transaction is a related party transaction and it is being done on an arm's length basis.
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