Dhanuka Lab’s Rs 1,116-Crore Plan To Buy Debt-Hit Orchid Pharma Approved By The National Company Law Tribunal

The National Company Law Tribunal (NCLT) has approved Dhanuka Laboratories’ Rs 1,116-crore resolution plan to take over the debt- ridden Orchid Pharma.

According to the terms set, lenders will get about Rs 1,116 crore, including the Rs 570 crore quoted by Dhanuka Laboratories. A consortium of 24 banks had lent a total of over Rs 3,200 crore to the drug maker and the lenders will take a haircut of around 65%.

Besides Dhanuka, two other companies, namely Accord Life Spec and Covalent Laboratories, had bid for the Chennai-based Orchid Pharma in a second round of bidding.

A second round of bids was necessitated after the previous winner, Ingen Capital, could not fulfil its financial obligation, including Rs 334 crore to be paid upfront in cash.

Earlier, the Chennai bench of the NCLT had annulled Ingen Capital's resolution plan in February and allowed 105 days to the resolution professional and the committee of creditors (CoC) to seek fresh expressions of interest.

Orchid had to sell assets to rein in debt. In 2012, it sold its penicillin business to US drug maker Hospira for USD 200 million.

Orchid Pharma is among the 28 large corporate defaulters in the Reserve Bank of India’s second list of debt-laden companies that were referred to the NCLT.

It was admitted in the Chennai bench of the NCLT in August 2017.