The Board of Directors of Morepen
Laboratories Limited have in principle approved
a proposal to offer an equity option to fixed
deposit holders as recompense to the trust and
patience shown by the FD holders for past 15 months. The
proposal, which is subject to approval by shareholders
in the forthcoming AGM of the company,. was finalized
after seeking the views of the FD Brokers and the key
Financial Institutions & Banks. This would give the
option to the FD holders to convert their deposit
amount into fully convertible debentures; and
also provide reward by way of possible equity upside to
80,000 depositors who have been with the Company for a
long time. The conversion is proposed to be at SEBI determined
formula at the value price which would include
the outstanding amount plus the overdue interest.
The scheme is in the best interest of the Fixed Deposit
holders, as it will enable them to liquidate their amounts
at an early stage as compared to the period of four years
directed in the Company Law Board Order.
The equity conversion may also be extended to the unsecured
creditors of the company who have supported the company.
In long term perspective, this proposal
will also help the Company by easing out the current pressure
on the operations of the Company due to regular outflow
of funds on account of FD repayments and also help increase
the shareholders' value. The uptrend in the pharma markets
world wide and the boom in the stock markets in India would
further help the investor to realize full potential of the
equity option.
Inking the turnaround of operations
The operations of the Company have also shown an upward
trend in this quarter and the company is now poised to make
progress in terms of sales and profits in the Jan-Mar-04
quarter going forward.
The sales of Rs.24 crores in the December
quarter represent a trend of consolidation given that this
is the second consecutive quarter in which the downfall
of sales of the previous three quarters has been arrested.
The API exports, mainly of Loratadine to
US market have contributed nearly
80% to the turnover of the company in last quarter
and is further poised to increase in the current Quarter.
Operations have become cash positive
due to the cost cutting measures introduced by the company
over the last few months.
With a very clear focus on the
High margin API exports, further Plans are afoot
to further augment Bulk drug sales in the high realization
US and Canada markets with additional growth also planned
for other regulated markets.
Rationalization of manpower has reduced
staff cost & the Manufacturing and other expenses have
also been brought down. the Company is taking further steps
to reduce the bill of materials as also to reduce other
overheads and expenses to boost margins further. These have
positively impacted the EBIDTA figures and will do so going
forward. An upbeat mood is permeating through the organization
boosting employee morale and creating a sense of pan-Company
ownership for what is clearly a revival story.
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