New Delhi: Drug major Cipla today said its subsidiary in the Netherlands will pump in up to euro 16.8 million (nearly Rs 120 crore) to form a joint venture with its Iranian distributor Ahran Tejarat Company.
The JV proposes to undertake manufacturing and marketing of pharmaceutical products in Iran. "Cipla Holding BV, a wholly-owned subsidiary of Cipla in the Netherlands, has entered into a joint venture (JV) agreement with Ahran Tejarat Company. As per the agreement, Cipla Netherlands will hold a 75 per cent stake in a joint venture company in Iran while the JV partner shall hold the remaining 25 per cent stake," Cipla said in a BSE filing.
"The total expected investment of Cipla Netherlands in cash in the joint venture company is estimated at up to a maximum of euro 16.8 million...." Cipla Netherlands will initially acquire a 75 per cent stake in Issat Company from the JV partner for euro 1.35 million payable in cash and the balance of up to euro 15.5 million is expected to be infused by Cipla Netherlands into Issat Company as equity over the next one year.
As part of the transaction, Cipla said, Issat Company, incorporated in 1998 in Iran and currently owned by the JV partner, is proposed to be used as the joint venture company.
"Issat Company has a valid pharmaceutical manufacturing licence in Iran and also owns certain fixed asset, but has not undertaken any business activity since incorporation and as a result, does not currently have any turnover," it added.
The acquisition is expected to be completed by March 2017, subject to completion of precedent conditions and regulatory approvals. Earlier in October 2014, Cipla had signed an agreement with the company for setting up a manufacturing unit in Iran.
"The earlier agreement executed by the company with the JV partner has been terminated," Cipla said. The stock was trading at Rs 566.10 on BSE, down 0.41 per cent, from its previous close.
