Morepen Group gets $100 million investment from Corinth Group

The Board of Directors of Morepen Laboratories approved the investment proposed by Corinth Group, a global private investment group headquartered in Switzerland, to the extent of $32.50 million in the parent company, Morepen Laboratories, out of a total $100 million investment in the promoter group, subject to the approval of the shareholders and other regulatory bodies.

Following shareholder and regulatory approval, Corinth would be allotted 58.50 million new equity shares on a preferential basis. This shareholding would equate to a 9.41 per cent equity stake in the company on a fully expanded capital base. The balance of $67.50 million would be in the promoter group companies.

The Board of Directors has also approved allotment of 50 million fresh equity shares to the promoter group, at a price determined by the Securities and Exchange Board of India (SEBI) pricing formula for preferential issuances, in lieu of the 98.50 million unsubscribed warrants issued in the last financial year which lapsed due to technical reasons. While the new allotment would be at Rs 38 per share, which will be 52 per cent higher than the earlier price of Rs 25 per for each warrant. After subscription of all the warrants, the promoter’s stake in the company would go up to 44.28 per cent, from 34.54 per cent, on a fully diluted basis.

Accordingly, the Total Fund Infusion in Morepen Laboratories, including investor funds and promoter’s equity, will be Rs 565 crores. The funds would be used in:

a) The expansion/scaling up of the company’s R&D centre/facilities to meet the significantly enhanced Active Pharmaceutical Ingredient (API) demand, market size of $40 billion, that Morepen has in the pipeline for the next three years

b) Setting up a new USFDA standard API plant to meet the significant ramp-up in scale and pipeline the company is working on

c) Establishing a facility for Finished Dosages as per USFDA standards at Morepen’s pharma complex in Baddi, Himachal Pradesh, to cater to regulated markets such as the US and Japan

d) Investment into diagnostics facilities including the manufacture of critical inputs/components/enzymes to meet regulated market standards. India is seeing an exponential jump in household spend on Point of Care/Home Diagnostics and Oxygen Concentrators and other life support systems with demand currently outstripping supply

e) Investment in new products and brands under the Dr Morepen umbrella to leverage its pan India distribution/supply chain and growth in online sales

f) Investment in Personal Care/Skin Care brands “Gubb” and “Happier”, as well as to leverage the company’s Pan India pharmacy/retail chain network to significantly scale up distribution