Strides to pay dividend of Rs 500 per share post Agila sale

Strides Arcolab will pay a special dividend of Rs 500 per equity share following the completion of its $1.75 billion sale of Agila Specialties division to Mylan Inc., the Bangalore-based company said in a statement. Strides Arcolab, which had originally proposed a distribution of $700 million to $800 million (pre-tax) to shareholders, said its board on Tuesday approved a special dividend of Rs 500 per share of face value Rs 10 each, resulting in a pre-tax distribution of approximately $550 million. "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," Strides Arcolab founder and group CEO Arun Kumar said. 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 said. "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," Strides said. 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 $1600 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). Shares of Strides Arcolab were trading at Rs 876.60 apiece on the BSE, up 1.43 per cent from its previous close.

Strides to pay dividend of Rs 500 per share post Agila sale

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