IndiaRF To Buyout Swift's API Business
Based on two people familiar with the situation, the India Resurgence Fund (IndiaRF), an India-focused distressed and special situations investment platform sponsored by the Piramal group and Bain Capital Credit, is in talks to acquire the active pharmaceutical ingredients (API) business of the debt-ridden Ind-Swift Laboratories (ISLL). According to sources, the investment could be in the range of Rs 1,000 crore.
The funds will be used to restructure the company's existing debt. Ind-Swift Labs has been burdened by debt, including 743 crore in non-convertible debenture liabilities as of March 31, 2023. The company has been working to repay the NCDs by refinancing debt or injecting liquidity.
The stock has risen 30% in the last six months due to the recovery of volumes for its key APIs such as clarithromycin, fexofenadine, ezetimibe, quetiapine fumerate, and donepezil, as well as the anticipation of a possible liquidity infusion. On July 20, the stock gained 1.16% and closed at 91.81 on the BSE. The company has a market capitalization of 542 crore.
During June 2018, the company issued NCDs worth Rs. 450 crore to repay its lenders under the one-time settlements (OTS) scheme. These NCDs have an IRR of 20%, a 10% annual coupon, and are redeemable in June 2024. According to a recent Care Rating report, the company's eventual liability will be higher than 450 crore, and as of September 30, 2022 stood at 670 crore.