Orchid Chemicals rallies 7% as promoters plan to hike stake to 45%

MUMBAI: Shares of Orchid Chemicals gained over 7 per cent in trade following reports that promoters are planning to increase stake in the company by 13 per cent to 45 per cent.

As a part of corporate debt recast, the promoters are planning to increase stake through preferential issue.

The board of directors on July 14 approved the issue of shares to promoters on a preferential basis pursuant to the conditions of CDR package sanctioned to the company by Corporate Debt Restructuring Cell.

According to the promoters, they have infused nearly Rs 74 crore into the company and preferential issue is equivalent to the money invested in the company. Promoters hold 32.28 percent stake in the company as of March 2014.

The company has been reeling under pressure due to high debt of over Rs 3,500 crore.

In March, the Corporate Debt Restructuring Empowered Group had approved Orchid Chemicals’ Debt Restructuring Package.

As per the CDR package, the company sold penicillin and penems (including carbapenems) API business together with its manufacturing facilities at Aurangabad, Maharashtra and Associated Research & Development facility at Sholinganallur, Chennai to the US-based Hospira for USD 200 million.

It has made a payment of Rs 681 crore to banks.

At 11:20 a.m.; the stock was at Rs 77.20, up 5.68 per cent, on the BSE. It touched a high of Rs 78.30 and a low of Rs 75.70 in trade today.