Drug firm Vivimed Labs has signed definitive agreements with healthcare firm OrbiMed Asia for investment of USD 42.5 million (nearly Rs 277 crore) in its subsidiary Vivimed Labs Mascarene Ltd.
Vivimed Labs Mascarene Ltd is the holding entity of the company's API (active pharmaceutical ingredient) business -- UQUIFA. In 2011, Hyderabad-based Vivimed Labs had acquired UQUIFA for USD 55 million.
"The proceeds of this fund raise will be utilised by the company primarily for debt reduction and optimisation of capital structure at the parent entity level and investment in the API business for capacity augmentation and organic growth," Vivimed Labs said in a regulatory filing.
Vivimed Labs said UQUIFA contributes approximately 60 per cent of the company's total consolidated revenues and a higher proportion of the reported Ebitda (earnings before interest, tax, depreciation and amortisation).
UQUIFA will pursue strategies aimed at delivering higher growth and further improvements in margin profile in coming years, it added.
"UQUIFA today is a significant part of Vivimed's presence in the pharmaceuticals business and is poised to grow well ahead of the industry on the back of our strategic initiatives and investments committed," Vivimed Labs Managing Director Santosh Varalwar said.
Stock of Vivimed Labs was trading 0.77 per cent higher at Rs 138.30 on the BSE.
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