Biocon does not plan to sell any more stake in Syngene. So how does it plan to raise the remaining funding commitment for the Viatris deal? Biocon MD & CEO Siddharth Mittal answers.
Buy / Sell Biocon share
Biocon's Managing Director & CEO Siddharth Mittal told CNBC TV-18 on Wednesday that the company has no plans of selling any more stake in its research services subsidiary Syngene International.
"With this sale, we do not expect to divest any more shares in Syngene," Mittal said. There is also a 90-day lock-in period for the promoter to not divest any further stake in Syngene.
Biocon sold 5.1 percent or 21.8 million shares in Syngene on Tuesday at an average price of Rs 560.04 apiece. It carried out this transaction to fund the equity component of the $3.3 billion acquisition of Viatris' biologics business. Post the stake sale, Biocon now holds 64.56 percent stake in Syngene from 69.99 percent earlier.
Biocon's subsidiary Biocon Biologics' signed a definitive agreement with Viatris in February this year to acquire the US-based company's biosimilars business. The acquisition will make Biocon Biologics a unique global vertical leader and Biocon will have the deepest biosimilar business in the industry.
Despite the fundraising, Biocon still has to raise another $75-$100 million to fund the contractual obligations. Mittal highlighted that there are various ways through which the balance funds would be raised. "There are structured investments, there is a debt option and there is cash that is already available on Biocon's balance sheet worth over $100 million," he said. Mittal also added that the company is working towards a bigger fundraise for Biocon Biologics.
Biocon's MD & CEO also mentioned that the company is in talks with a few investors who want to acquire a stake in Biocon Biologics. "There are multiple fundraise discussions going on and we are very confident that we will be able to fund this $250 million," he said.
On Serum Institute of India's plans to increase stake in Biocon Biologics from the current 15%, Mittal says that it can invest an additional $300 million into Biocon Biologics. "Post dilution resulting from the Viatris acquisition, Serum will be holding anywhere between 12-13%," he said.
Other key takeaways from the conversation:
For the full interview, watch the accompanying video
First Published: IST