Indian drugmaker Glenmark Pharmaceuticals Ltd on Tuesday said it plans to raise up to $200 million through US dollar-denominated bonds to refinance existing debt. For the bond issuance, the pharmaceutical firm will organize roadshows from 14-19 January covering Asia, Europe and Middle East, it informed the exchanges.
The fund-raising will happen through US dollar-denominated fixed rate senior unsecured notes with a tenor of up to four years. The bonds are rated ‘BB/Stable’ by Fitch Ratings.
“Fitch expects financial leverage – measured by adjusted net debt/operating EBITDAR – of 2.5x in the financial year ended March 2019 (FY19) to stay broadly stable over the next few years. Glenmark is likely to continue to incur moderate capex on fixed assets and to acquire territorial sale rights for other companies’ drugs, consistent with our view of the company’s growth strategy,” the rating agency said in a release.
The proceeds from the bond issuance will be used to refinance existing debt raised via dollar bonds in 2016. The earlier dollar notes, priced at 4.5% coupon rate, have a bi-annual payment schedule and mature in 2021.
The company has appointed Barclays, Emirates NBD Capital, ING and Mitsubishi UFJ Financial Group as joint global coordinators to the issue.
In September 2018, Glenmark had refinanced part of its debt raised via foreign currency convertible bond, due to mature in 2022, through a $90.8 million US-dollar denominated bank loan.
In terms of its funding profile, half of the company’s borrowings were raised through capital market instruments, of which dollar bond issuances formed nearly 31% of the overall debt. The other half came from bank loans, most of which are dollar-denominated.
The Saldanha Family Trust, led by Glenmark’s chairman and managing director Glenn Saldanha, holds 46.6% stake in the company, while Singapore’s state investment arm Temasek Holdings (Pvt) Ltd holds 1.3% through its wholly-owned indirect subsidiary Mauritius-based Aranda Investments Pte Ltd.
Other shareholders in the company include HSBC Pooled funds, which owns 3.3%, Life Insurance Corporation of India that holds 1.8%, and the Franklin Templeton Fund, which owns 1.9% in the company.
Glenmark has 16 facilities and seven R&D centres across US, India, Switzerland, Argentina and Czech Republic, and has local offices in over 50 countries and commercial presence in over 80 countries across the world.
While the US, at 32%, garners the highest share of revenue for the company, India comes close at 29% revenue contribution. About 12% comes from Europe, 4% from Latin America and 13% from the rest of the world, including other Asian and African countries.
The company’s sales for the last twelve months ending 30 September, 2019, stood at ₹10,269 crore, while its operating profit/ earnings before interest, tax, depreciation and amortization (EBITDA) stood at ₹1,603.7 crore, according to its investor presentation.
The company had cash and bank balances worth nearly ₹925.6 crore on its books, as on 30 September, 2019. Its net debt stood at ₹3,655.9 crore in the first half of fiscal 2020, while its net debt/EBITDA or leverage ratio stood at 2.28x, during the period.