BainPiramal led fund offers Panacea a Rs 992 crore bail out deal

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MUMBAI: The Bain Capital and Ajay Piramal group-run distressed asset fund India Resurgence Fund Monday said it will invest Rs 992 crore in New Delhi-based pharma player Panacea BiotecNSE -2.99 % which is facing financial headwinds. 

The joint venture fund has been active in the pharma business and the announcement comes after the February 26 announcement by Panacea about reaching a one-time settlement with the lenders to pay off Rs 864 crore of debt. 

In a statement, the fund said the deal involves an investment of Rs 864 crore into a forthcoming non-convertible debenture issue, and Rs 32 crore towards subscription in share warrants to be allotted on a preferential basis. 

Subject to exercise of warrants, the fund and its affiliates will collectively own 10.4 percent of the company on a fully diluted basis, it said. 

The subscription amount represents 25 percent of total amount of Rs 128 crore proposed to be raised on issuance of equity shares against warrants as per Sebi rules, it added. 

Fund's managing director Shantanu Nalavadi said Panacea is embarking on a journey to enhance its market position as a strong and research-focused pharma and biotechnology company. 

He further said the fund has invested to work closely with the promoters and management team to drive rapid revenue growth and sustainable profitability improvement. 

"We look forward to leveraging their proven global expertise in restructuring and turnarounds, and are certain that our combined efforts will now help accelerate our ambitious growth and profitability targets," Panacea managing director Rajesh Jain said. 

On February 26, Panaces had arrived at a one-time settlement with the lenders and at the extraordinary general meeting held on March 25, the shareholders had allowed the management to raise up to Rs 128 crore via issue of warrants on a preferential basis. 

Panacea scrips shed 0.19 percent to close at Rs 181.15 on the BSE as against a 0.42 percent correction on the benchmark.