Orchid Pharma to repay bonds through overseas funds, stock down 4%

The shares of Orchid Pharma are trading 4 percent lower at Rs 115 after reports stated that the company will redeem $117 million of outstanding bonds using funds raised via overseas borrowings.

In an interview with CNBC TV 18, K Raghavendra Rao, chairman and managing director, Orchid Chemicals, said that the company has got a sanction of $100 million of external commercial borrowings , which it will use to repay the bonds that are maturing by February 2012. “We need to repay $117 mn plus YTM by February-end 2012. So we are replacing dollars with dollars and we are raising less than what we need to repay,” said Rao.

As more than 80 percent of Orchid Chem’s export sales are in dollars, the company will not be impacted by currency fluctuations and will actually gain wit the rupee’s depreciation. “Our P&L is $400 million of exports each year and a net of imports for the material cost that goes into that- we are net dollar-positive of at least $200 million year-over-year, whereas the bonds are maturing once in five years,” Rao told CNBC TV 18.

He added that the gap between the foreign currency bonds and the external commercial borrowings will be met through internal accruals.

The stocks had earlier opened at Rs 135, touching the day’s high at Rs. 137 and low at Rs. 113. The total traded quantity stood at 12.51 lakh shares on the BSE.

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