India Resurgence Fund (IndiaRF), backed by Piramal Enterprises and Bain Capital Credit, is investing about $144 million (Rs 992 crore) in New Delhi-based drug firm Panacea Biotec, per an announcement.
The investment proceeds will be used for a one-time settlement with existing lenders, general working capital and growth requirements of the company, IndiaRF and Panacea Biotec said in a joint statement. IndiaRF, which is an equal joint venture between Piramal Enterprises and Bain Capital Credit, has been active in the pharma business.
The announcement comes after a February 26 announcement by Panacea about reaching a one-time settlement with its lenders to pay off Rs 864 crore of debt. The investment has been structured by way of non-convertible debentures (NCDs) of up to Rs 864 crore and subscription amount of Rs 32 crore towards share warrants to be allotted on a preferential basis.
The subscription amount represents 25 per cent of the Rs 128 crore proposed to be raised upon issuance of equity shares against warrants, the statement added. Subject to the exercise of warrants, IndiaRF along with its affiliates will collectively end up owning 10.4 per cent stake in the company on a fully diluted basis, it added.
“The purpose of this investment is to not only restructure the company’s balance sheet, but more importantly, work closely with the promoters and management team, to drive rapid revenue growth and sustainable profitability improvement,” IndiaRF MD Shantanu Nalavadi said.
Panacea Biotec is a biotechnology company focused on the manufacturing and marketing of pharmaceutical formulations, biopharmaceuticals and vaccines. Its portfolio includes products in therapeutic areas of oncology, organ transplantation, nephrology, diabetes, osteoporosis, cardiovascular diseases and pediatric vaccines.
The company said it is working on a pipeline of generic products using nanotechnology and platform drug delivery technologies like micro-particles, liposomes and gastro-retentive systems.