“It (resolution plan) shall be binding on the corporate debtor (Parental Drugs India), its employees, members, and creditors, including the central government, any state government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force is due, guarantors and other stakeholders involved in the resolution plan,” said division bench of judicial member VG Bisht and a technical member Prabhat Kumar.
The company’s resolution professional had received a claim of Rs 1,306 crore and the successful bidder is paying about Rs 90 crore to acquire the company through the insolvency resolution process. The bankrupt pharma company’s admitted liabilities stood at Rs 1,287 crore.
Mumbai-headquartered Parental Drugs India was admitted under the Corporate Insolvency Resolution Process (CIRP) in February 2023 in an application filed by the Punjab National Bank. The bank approached the National Company Law Tribunal (NCLT) after the pharmaceutical company defaulted on its over Rs 196 crore in dues.
Last year in March, the resolution professional (RP) of the company received interest from about 26 prospective buyers to acquire the company. However, in June, the lenders received only two revised resolution plans from United Biotech Pvt Ltd and IHL Lifesciences Pvt Ltd. IHL Lifesciences, formerly known as Virat Trade Corp Pvt Ltd is primarily engaged in the manufacturing, sale and distribution of intravenous fluids and is also a leading player in the import, sale and distribution of polymer products in central India.According to Dhiraj Mhetre, Partner, Khaitan Legal Associates, pharmaceutical companies undergoing the resolution process are lucrative for strategic investors and buyers in the API and pharmaceutical space.
“In many cases, we have seen that companies having the required machinery, equipment, intellectual properties and regulatory approvals for medicines in domestic and international markets to do business go into CIRP due to financial constraints and consequential defaults,” said Mhetre. “In such cases, it can be extremely desirable for a pharma investor to step in at the resolution stage and acquire the company under stress, often at 10-20 cents to a dollar rate,” he further adds.
Last year, Intas Pharmaceuticals-Shamrock Pharmachemi consortium’s application to acquire Unimark Remedies. Before that US-based food technology startup Perfect Day Inc. had acquired Gujarat-based Sterling Biotech Ltd through insolvency resolution process. In 2019, Gurgaon-based Dhanuka Laboratories also acquired debt-ridden Orchid Pharma for Rs 1,116 crore through an insolvency resolution process.
