Lupin Pharma has sold the entire stake in its Japanese subsidiary Kyowa to Plutus Ltd, Japan, an entity affiliated with private equity firm Unison, in an all-cash transaction for $300 million. While Lupin is fourth-largest drugmaker in India, Kyowa is Japan's sixth major generic drugmaker.
As per the company, Lupin's board has approved the sale of its entire 99.82% equity interest in Kyowa Pharmaceutical to Unison's entity Plutus for JPY 57,361 million (Rs 3,700 crore), subject to the approval of shareholders of the company. The proposed transaction will generate post-tax net cash inflow of approximately JPY 32,596 million ($300 million or Rs 2,103 crore).
After the stake sale, Lupin will not have any equity interest (direct or indirect) and managerial or indirect control over Kyowa. The company will soon convene an extraordinary general meeting of its shareholders to seek their approval.
Post-transaction, Lupin's net debt will stand at Rs 1,129 crore compared to Rs 4,361 crore as on September 30, 2019. Its net debt to equity ratio will improve to 0.08 as compared to 0.32 as on September 30, 2019.
"The deal proceeds will be utilised to strengthen Lupin's balance sheet as well as provide growth capital to support organic and inorganic initiatives for our focus markets," Vinita Gupta, CEO, Lupin, said.
Company MD Nilesh Gupta said the partnership with Unison would enable Kyowa to leverage its strong platform and human capital to achieve its full potential. "We remain committed to advancing our complex generics, biosimilars and speciality portfolio globally, including Japan," he said.
Lupin is a significant player in the cardiovascular, diabetology, asthma, pediatric, CNS, GI, anti-infective and NSAID space and holds a global leadership position in the anti-TB segment. It recently reported a consolidated net loss of Rs 127.1 crore in the second quarter-ended September 30, 2019, impacted by a one-time loss of Rs 546.5 crore. Consolidated revenue from operations of the pharma major increased 10.3 per cent year-on-year (YoY) to Rs 4,359.7 crore in Q2FY20 as against Rs 3,951 crore in Q2FY19.
Edited by Manoj Sharma