Financial Daily from THE HINDU group of publications
Wednesday, Nov 03, 2004
Mergers & Acquisitions
Shriram group, Sembcorp may pick up stake in Ramky Pharma
Chennai , Nov. 2
THE Chennai-based Shriram group and Sembcorp Industries of Singapore are expected to pick up stakes in Ramky Pharma City (India) Ltd, a company that is executing a Rs 700-crore `bulk drug manufacturing theme park' at Visakhapatnam in Andhra Pradesh.
Ramky Pharma City has a paid-up equity of Rs 30 crore. The Andhra Pradesh Industrial Investment Corporation has 11 per cent stake in the equity and the rest is held by the Mr Ayodhya Rami Reddy-promoted Ramky group.
Mr Rami Reddy told Business Line on Monday that the extent of equity that Shriram and Sembcorp would hold in the company was yet to be decided.
The 2,120-acre industrial estate is being created on `build-operate-own' basis. "Seventy per cent of the space is sold out," he said, adding that among the companies that had agreed to set up units in the park were Novartis, Aurobindo Pharma, Orchid Chemicals, Shasun and Matrix Laboratories.
He said that the project also included construction of a 100-MW power plant that would cost Rs 400 crore and a Rs 100-crore wastewater treatment plant. The power project will be executed by an SPV in which the pharma companies which take space in the park will hold equity stakes.
The first phase of the project is expected to be ready by August 2005 and the second phase by May 2006, Mr Reddy said.
He said that the developer (Ramky Pharma City) would take up responsibility for maintenance of all the utilities in the park power and water supply, waste and effluent management, roads, fire fighting and even a common canteen.
The Rs 150-crore Ramky group is into two broad businesses civil infrastructure and waste management. The group's flagship company, Ramky Infrastructure Ltd, has three lines of activities undertaking civil construction contracts such as for building roads, undertaking contracts under public-private partnership model with separate SPVs for each project and infrastructure consultancy.
Ramky Infrastructure has today contracts worth Rs 800 crore and on the basis of this, Mr Rami Reddy is hopeful of the company achieving a turnover of Rs 1,000 crore by 2007-08.
The contracts on hand, apart from jobs worth Rs 250 crore from Ramky Pharma City, include a Rs 75-crore contract for building a housing colony for Singareni Collieries and contracts from water supply and sewerage boards of Punjab, Karnataka and Rajasthan.
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