The Chennai bench of National Company Law Tribunal (NCLT) has approved the resolution plan submitted by US-based lngen Capital Group for Orchid Pharma. The beleagured pharma company on Friday informed the exchanges that the resolution plan by Ingen Capital Group has been approved by the NCLT on September 17, under the Insolvency and Bankruptcy Code, 2016.
The committee of creditors (CoC) had in June approved the resolution plan by Ingen Capital and the resolution professional (RP) had submitted the CoC-approved resolution plan to NCLT.
Ingen Capital is a manager of fixed income and distressed asset funds that invest globally in transportation infrastructure, renewable power utilities and healthcare. The financial details of the bid were not available immediately. However, sources said the lenders might have taken a haircut beyond 50% and are likely to receive close to Rs 1,000 crore out of the total Rs 3,200 crore outstanding.
Ingen has to pay the amount in 30 days to settle the banks’ dues. A consortium of 24 banks had advanced sums to the tune of Rs 3,200 crore to the pharmaceutical manufacturer.
Admitting a petition filed by one of the operational creditors, Lakshmi Vilas Bank, the NCLT had in August 2017 issued an order to begin the process of insolvency of Orchid Pharma, once a key player in injectables and active pharmaceutical ingredients (API).
The CoC had in April this year rejected three bids received when the lenders’ panel was not satisfied with the ‘quality of offering’, and subsequently authorised the RP to initiate fresh bidding process.
Orchid Pharma had been facing severe financial crisis with lenders and investors approaching legal fora for a remedy and was brought under the corporate debt restructuring scheme, initiated during 2013, for the revival of its operations.
The CoC has considered the resolution plan of Ingen Capital Group in its meeting on June 4 and the plan received an affirmative vote of 78.64% of the CoC by value in its favour, said the filing.
According industry watchers, one attraction for the investors to look at Orchid Pharma was its ability to augment the capacity relatively faster because of the fact that it has an US FDA approved facility in Tamil Nadu.
The company has a generics oral formulations facility at Irungattukottai and an antibiotic (cephalosporin) active pharmaceutical ingredient manufacturing facility at Alathur in Tamil Nadu, apart from another oral formulations facility emerging in this location.
Orchid Pharma had sold its generic injectables business to the US-based Hospira Healthcare, which was later acquired by Pfizer, in 2009 for a consideration of $400 million. In 2012, the company also announced sale of its carbapenem and penicillin API manufacturing facility in Aurangabad along with the related research and development facility in Chennai and the product pipeline to Hospira for a consideration of $200 million.
