There are three pharmaceutical bidders for debt-ridden Orchid Pharma Ltd in the second round of Corporate Insolvency Resolution Process (CIRP) — Gurgaon-based Dhanuka Laboratories, Chennai-based Accord Life Spec and Hyderabad-based Covalent Laboratories — and the one with the highest bid might get a nod from the bankers for the resolution plan.
According to sources close to the process, while Dhanuka Laboratories is expected to have an edge over the others, the Chennai-based Accord Life Spec and Covalent Laboratories are also in the race. The Committee of Creditors (CoC) will submit its decision on the highest bidder with the National Company Law Tribunal (NCLT), for final approval.
Dhanuka Lab is a prominent manufacturer and exporter of Oral cephalosporin APIs, an area in which Orchid Pharma is strong. Covalent also specialises in manufacturing Cephalosporins and its intermediates and the synergy for the company to have Orchid’s manufacturing facilities and other capabilities is good, said experts.
Accord Life Spec is a part of Accord Group, which has diversified interests in medical education, technical universities, hospitals, breweries and hotels. The company is a player in speciality segments such as generics and formulations for oncology and other therapeutic applications. According to sources, however, the highest bid this time would see a larger haircut compared to Rs 1,490 crore offer submitted by the previous bidder Ingen Capital. A consortium of 24 banks has lent a total of over Rs 3,200 crore to Orchid.
Orchid Pharma Ltd is making a second attempt to find a resolution plan under the CIRP, as the previous resolution plan by US-based Ingen Capital LLC was annulled by the NCLT after the American firm failed to remit the upfront payment as per the norms. Ingen Capital’s resolution plan was approved by NCLT on September 17, 2018, and as per the approved Resolution Plan, it was to deposit Rs 1,000 crore upfront to the financial creditors. But it sought more information, which the Resolution Professional didn’t allow.
The NCLT, on February 28, annulled Ingen’s resolution plan and allowed 105 days for Corporate Insolvency Resolution Process (CIRP) considering the time lost from the date of previous expression of interest, November 16, 2017, to the date of annulment of the approved resolution plan of Ingen Capital. It has also reinstated the RP and the Committee of Creditors (CoC) to ensure the running of the company as a going concern.
The National Company Law Appellate Tribunal (NCLAT) later directed the Central Government to take action against Ingen, its managing director and other members of its board for not implementing its resolution plan. It also imposed a cost of Rs 10 lakh on Ingen to be paid to the CoC within 30 days.
Source: Business Standards, June 5, 2019