Strides to sell manufacturing facility in Singapore for Rs 125 crore
"Proceeds from the transaction will be utilized for debt reduction," Strides stated.
Bangalore: Strides Pharma Science Limited has announced that its step‐ down wholly owned subsidiary, Strides Pharma Global Pte. Limited, Singapore, has entered into binding agreement with Rxilient Biohub Pte. Ltd. for the sale of its manufacturing facility including licenses, equipment, vendor contracts, etc. for a total cash consideration of $15m.
As part of the transaction, Rxilient Biohub will also take over the long term lease obligation of the manufacturing site from Strides. The manufacturing site was mothballed last year as part of the manufacturing network optimization and cost reduction programs announced as part of FY23 resetstrategy.
"Efforts were focused in integrating the US and the products that were supplied for US government procurement have been transferred to the Chestnut Ridge, US manufacturing site. This transaction is the culmination of the manufacturing network optimization efforts as we continue to focus on driving profitability and operational efficiency," Strides stated in a release.
"This sale will help further reduce annual costs by ~$9m (~ ₹750m), of which ~$2m (~₹180m) reduction in operating expenses ( EBITDA accretive) and ~$7m (~₹570m) in Depreciation and operating lease expenses, thereby being immediately accretive to EPS ( annualized ~ ₹ 7/share)," the Company stated.
The transaction is expected to close in Q3FY24 on receipt of necessary approvals and completion of customary & other closing conditions.
"Proceeds from the transaction will be utilized for debt reduction," it added.
Rxilient Biohub, incorporated in Singapore, is mainly engaged in manufacture of pharmaceutical products and preparations for human use and manufacture of vaccines for human use. Rxilient Biohub plans to start CDMO business in Singapore.
