Cipla redraws Iran plans with new agreement, to invest Rs 121 cr

Cipla said its wholly owned subsidiary of the Company in Netherlands will set up a 75% joint venture with Ahran Tejarat Company for manufacturing and marketing of pharmaceutical products in Iran.

An earlier agreement executed by the Company with the Iranian firm has been terminated.

The total investment will be euro 16.875 million, which comes to about Rs 121 cr.

The JV Partner shall hold the remaining 25% stake.

“As part of the transaction, Issat Company, an existing Company in Iran incorporated on 19 January 1998 and currently owned by the JV Partner, is proposed to be used as the joint venture Company for the purposes of this transaction,” the Indian company said.

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.

Cipla Netherlands will initially acquire a 75% stake in Issat Company from the JV Partner for a consideration of Euro 1.35 million payable in cash and the balance amount of up to Euro 15.525 million is expected to be infused by Cipla Netherlands into Issat Company as equity over next one year period.

The acquisition is expected to be completed by March 2017, Subject to Completion of Conditions precedent and applicable regulatory approvals, it said.