Dhanuka Laboratories leads race for Orchid Pharma

Mumbai: Gurgaon-based Dhanuka Laboratories has been shortlisted as the highest qualified bidder to take over distressed company Orchid Pharma. The company has bid less than 1,000 crore for Orchid that owes lenders 3,200 crore, which means lenders will vote for what will effectively mean a close to 70% haircut.
Besides Dhanuka, two other companies - Accord Life Spec and Covalent Laboratories - had bid for Chennai-based Orchid Pharma in a second round of bidding, which was ordered by the Chennai bench of the National Company Law Tribunal (NCLT) in February.

A second round of bids was necessitated after the previous winner, Ingen Capital, could not fulfil its financial obligation, including 334 crore in upfront cash. The Chennai bench of the NCLT annulled Ingen Capital's resolution plan in February and allowed 105 days to the resolution professional and the committee of creditors (CoC) to seek fresh expressions of interest.

"In this second round of bidding so far, Dhanuka has topped the evaluation matrix, though its bid at less than 1,000 crore is substantially lower than the 1,490 crore, which was offered by Ingen in the first place," said a banker involved in the deliberations. "The haircut is deeper than the previous bid, so we are a bit reluctant. But the proposal will be put to vote and each lender will have to take a call."

A consortium of 24 banks has lent a total of over 3,200 crore to the drug maker. Expectations are that the proposal will be put for voting by the lenders on Friday.

"Dhanuka is the best bid we have so far, though we would have liked to have a higher bid. If lenders agree then the proposal will be okayed by the CoC and put forth in front of the Chennai NCLT," said another banker involved in the process. State Bank of India is the lead lender for the account.