13 June 2019: A last-minute change by Punjab National Bank (PNB) after voting in favour of and suddenly reversing its decision has turned the acquisition of beleaguered Orchid Pharma by Dhanuka Labs into a cliffhanger. PNB is one of the creditors.
“E-voting was kept open from 9am on June 7 to 4pm on June 11. The resolution was voted in favour of by the CoC (committee of creditors) with 67.07% share. However, an email from one of the CoC members (PNB) was received at 3:33pm, asking for a change in their e-voting for the earlier-mentioned resolution to dissenting. And once this change is considered, the voting for the resolution plan will be 65.53% (the required percentage of voting is 66%),” Orchid said in a regulatory filing.
“Based on legal advice received, the resolution professional shall file the resolution plan of Dhanuka with the NCLT and seek guidance with respect to accepting the change in stand taken by PNB and on the treatment of voting percentage,” the filing added.
The details of Dhanuka’s resolution plan are not known as yet. Three privately held pharmaceutical companies — Accord Life Spec, Dhanuka Laboratories and Covalent Laboratories — had evinced interest to take over Orchid, which is under the corporate insolvency process.
The resolution professional appointed by the NCLT had called for a second round of bids after Ingen Capital’s bid was rejected due to failure to produce the promised money upfront. “The key is the valuation. We understand that it could be significantly lower that what Ingen offered,” a source said. Ingen had eyed Orchid with a bid of Rs 1,490 crore, but the transaction was annulled when they failed to bring in the funds. Dhanuka Labs is part of the Rs 1,000-crore Dhanuka group that has interests in agrochemicals and pesticides, besides pharma. The pharma business makes and exports oral cephalosporin drugs.