Aurobindo, Cadila, UPL in fray to acquire bankrupt Sterling Biotech

Aurobindo Pharma, Cadila Healthcare and UPL are among five companies in the race to acquire bankrupt Sterling Biotech through the liquidation process. The other two are integrated pharmaceutical manufacturing solutions company ACG Associated Capsules and Gland Celsus Bio Chemicals.

The liquidator had invited bids on July 21 for the world’s sixth-largest manufacturer of pharmaceutical gelatin to sell the company as a going concern at a reserve price of Rs 548.46 crore. Lovkesh Batra, a member of the Mamta Binani-led liquidation team, confirmed the development but declined to provide details. The shortlist was whittled down from about a dozen aspirants, he said.

The five bidders didn’t respond to queries.


“The qualified bidders will have a time of 15 days beginning from August 23 to inspect the Sterling Biotech, and the auction will be conducted on September 9, 2021,” said one of the persons.

Sterling Biotech owes more than Rs 8,100 crore to financial and operational creditors.

“Even when the company is facing liquidation, it has retained its licences and approvals, and there are about 1,000 people on its rolls,” said the person cited above.

The company has manufacturing plants at Vadodara, Karakhadi and Masar in Gujarat and one in Ooty in Tamil Nadu. Consolidated revenue for FY20 and FY21 was Rs 345.69 crore and Rs 347.44 crore, respectively.

Sterling Biotech is an attractive proposition as it has all requisite approvals, said Ankita Singh, founder of law firm Sarvaank Associates.

‘List of Bidders Shows Co’s Value’
The Mumbai bench of the National Company Law Tribunal (NCLT) admitted the Chetan and Nitin Sandesara-promoted Sterling Biotech under the Corporate Insolvency Resolution Process (CIRP) following a plea filed by state-owned Andhra Bank on June 11, 2018. The NCLT ordered liquidation of the company as a going concern in May 2019.

“For a company embroiled in serious financial fraud allegations, the list of bidders indicates there may be at least some value in the shipwreck,” said Srishti Ojha, founder of boutique transaction advisory law firm Verist Law. “There should be a regulatory mechanism to spot and control the leakage much before hundreds of thousands of crores are written off by banks.”

The Sandesaras are said to have fled India and are believed to be in Africa. In June last year, the Enforcement Directorate had attached properties worth more than Rs 9,700 crore owned by the Sandesaras.

The group, including subsidiaries Sterling SEZ and Sterling International, collectively owes Rs 15,000 crore to financial and operational creditors.