Strides Arcolab on Tuesday announced a special dividend Rs 500 per equity share of Rs 10 each to the shareholders of the company following the completion of its $1.75 billion sale of Agila Specialties Division to Mylan Inc.
The announcement was made after a meeting of the board of directors on Tuesday. The special dividend will be paid on or after December 27, 2013 to the shareholders of the company.
The board of directors have approved change of financial year of the
company from January-December to April-March effective from April 1, 2014.
Hence, the current financial year for the company will be for a period of 15 months that is from January, 2013 to March, 2014.
The company, which had originally proposed a distribution of $700 million to $800 million (pre-tax) to shareholders, cleared dividend (pre-tax) distribution of approximately $550 million.
Commenting on the development, Strides Arcolab founder and group CEO Arun Kumar said: "We are delighted that we could create value for the shareholders returning 88 per cent of the free cash available with the company by way of a special dividend."
In a statement, the company said an additional amount of $250 million was held back due to the warning letter received by Agila for one of its injectable manufacturing sites in Bangalore.
It will be paid in whole or part to Strides by Mylan upon satisfaction of certain regulatory conditions related to its injectable facilities in India.
"The company had engaged with the USFDA prior to the closure of the transaction and expects satisfactory resolution of the regulatory conditions and those contingent conditions will be satisfied sometime in 2014," it said.
Further, the company in collaboration with Mylan had agreed to bring in third party consultants to oversee remediation actions and the company has set aside funding for these costs, it added.
Strides Arcolab said there has also been certain revisions in the transaction that was announced in February this year.
"The aggregate base consideration payable at closing of the transaction was $1,600 million subject to customary closing adjustments. In addition, a sum of $250 million was payable at or following the closing of the transaction based on satisfaction of certain conditions."
In September, the USFDA had issued a warning letter to Agila Specialties over violation of manufacturing norms in one of its plants in Bangalore following an inspection in June.
Earlier in the same month, the government had approved Mylan's deal to fully acquire Agila Specialties from Strides Arcolab. The companies had announced the deal in February.
While announcing the deal, the US-based firm had said that Agila will bring a broad product portfolio of more than 300 filings approved globally and marketed through a network covering 70 countries, including 61 abbreviated new drug applications (ANDAs) approved by the US Food and Drug Administration (USFDA).
The stock of the
company closed 1.48 per cent higher at Rs 876.95 on the BSE.
-With PTI inputs
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