GDR issue fully subscribed at 12 per cent premium to the current domestic price; to be listed on the Luxembourg Stock Exchange
• $ 15.25 million raised through issue of 5 million GDRs of $3.05 per GDR representing 50 million shares of Rs 2 face value
• Proceeds to be used for retiring high cost debt and partially for business operations and R&D initiatives

Morepen Laboratories has successfully closed its Global Depository Receipts (GDR) issue on the Luxembourg Stock Exchange. The issue opened on 27th March, 2003 and closed on 28th March 31, 2003 and was fully subscribed. The board of directors of Morepen Laboratories has also approved the allotment of shares at the board meeting held on 30th March, 2003.

Morepen has become the first Indian pharmaceutical company in recent past to garner funds and get listed on an international bourse.

The company has raised $15.25 million (RS 72.5 crore) through the issue of 5 million GDRs at $3.05 per GDR representing 50 million shares of Rs. 2 face value.
The issue, second by any Indian company this year, received very encouraging response from the investors and was subscribed primarily by European institutional investors. The issue has been subscribed at a premium of over 12 per cent to the current prevailing price in the domestic market.

While the issue was lead managed by Kaupthing Bank, Luxembourg, The Bank of New York (Luxembourg) SA was listing agent as well as depository to the issue. ICICI Bank acted as the custodian to the issue. The company will now seek listing of these fresh shares in the domestic market as well.

Speaking on the occasion, Mr. Sushil Suri, Chairman and Managing Director, Morepen Laboratories said, "We are excited to have received an overwhelming response to our GDR offering. There is a general bullishness among international investors in the pharma sector and that is the reason we went in for a GDR offering. They find current valuations quite attractive."

The company will use the proceeds of the issue for retiring high cost borrowings and partially for business operations and new R&D initiatives. Retirement of high cost debt will lead to substantial saving and a boost to the bottomline through saving in interest cost.

"We recently announced our strategy to be more aggressively involved in Research and Development (R&D) activities and entered into a collaborative research program with NIPER. After filing many product and process patents under PCT for high value molecules like Atorvastatin Calcium and Desloratadine, we are now concentrating on Medicinal Chemistry and Biopharmaceuticals. As a result, a part of the proceeds will also be dedicated towards development of new formulations and processes" Mr. Suri added.

Following the issue of 50 million fresh shares, the equity of the company will increase by Rs. 10 crore representing 50 million shares of a face value of Rs. 2. The reserves will get a boost of Rs. 62.5 crore.