Daiichi sells $1 bn bonds to refinance Ranbaxy buy
Japan’s Daiichi Sankyo, the new owner of Ranbaxy Laboratories said it had sold bonds worth 100 billion yen ($1 billion) to refinance loans it had taken to acquire a controlling stake in the Indian pharma-ceutical company.
By ET Bureau |
NEW DELHI: Japan���s Daiichi Sankyo, the new owner of Ranbaxy Laboratories, on Wednesday said it had sold bonds worth 100 billion yen ($1 billion) to refinance loans it had taken to acquire a controlling stake in the Indian pharma-ceutical company.
Japan���s third-largest drugmaker said in a statement that the bonds were sold in two transactions ��� 60 billion yen at an annual interest of 1.078% for five years and 40 billion yen at 1.776% maturing in 10 years. Last year, the Japanese company acquired a 64% stake in Ranbaxy for 488.3 billion yen, or about Rs 20,000 crore.
The acquisition was funded through a combination of its cash reserves and borrowings from banks. Daiichi Sankyo will have 140 billion yen of bank loans outstanding after using proceeds from the bond sale for repayment, a Bloomberg news agency report said.
Last month, the company had registered with the Japanese government to sell as much as 300 billion yen in bonds. Daiichi Sankyo acquired Ranbaxy at Rs 737 per share in November, but the stock price has plummeted since because of adverse market conditions and a US decision to ban 30 of its drugs for falsification of test results.
On Wednesday, the Ranbaxy stock closed at Rs 276.75 on the Bombay Stock Exchange. Daiichi Sankyo has written down 351.3 billion yen because of the slump in Ranbaxy���s share price.
After three consecutive quarters of losses, Daiichi Sankyo last month appointed its nominees to run the Indian company in place of Malvinder Singh, who resigned as the chairman and chief executive.
Japan���s third-largest drugmaker said in a statement that the bonds were sold in two transactions ��� 60 billion yen at an annual interest of 1.078% for five years and 40 billion yen at 1.776% maturing in 10 years. Last year, the Japanese company acquired a 64% stake in Ranbaxy for 488.3 billion yen, or about Rs 20,000 crore.
The acquisition was funded through a combination of its cash reserves and borrowings from banks. Daiichi Sankyo will have 140 billion yen of bank loans outstanding after using proceeds from the bond sale for repayment, a Bloomberg news agency report said.
Last month, the company had registered with the Japanese government to sell as much as 300 billion yen in bonds. Daiichi Sankyo acquired Ranbaxy at Rs 737 per share in November, but the stock price has plummeted since because of adverse market conditions and a US decision to ban 30 of its drugs for falsification of test results.
On Wednesday, the Ranbaxy stock closed at Rs 276.75 on the Bombay Stock Exchange. Daiichi Sankyo has written down 351.3 billion yen because of the slump in Ranbaxy���s share price.
After three consecutive quarters of losses, Daiichi Sankyo last month appointed its nominees to run the Indian company in place of Malvinder Singh, who resigned as the chairman and chief executive.
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