Swiss drug firm AstraZeneca Pharmaceuticals AB has cut the financial grant to its Indian arm to $14 million from $22.5 million announced earlier as the subsidiary’s financial performance has been in line with the parent firm’s expectations.
Last year, in July, the Swiss firm had decided to provide a financial grant in the range of $22.5-26.5 million to the Indian arm — AstraZeneca Pharma India — over the next three years to help it establish presence in the Indian market.
AstraZeneca Pharmaceuticals AB (AZP AB) believes that business and financial performance of the Indian arm has been in line with more recent expectations and that it would require around $3.5 million by 2013-14 end and no further grant thereafter, AstraZeneca Pharma India said in a filing to BSE.
“It has, therefore, been decided by the AZ PAB board that the total amount of financial grant to be provided by AZP AB to the company (Indian arm) shall stand revised at $14 million as against $22.5 million originally envisaged and approved as part of financial assistance package,” it added.
The assistance will continue till end of 2013-14, post which the payments under the subvention agreement will cease, it said.
As part of the arrangement announced last year, AZP AB was to provide the first tranche of $14 million to its Indian arm in the current financial year.
AZP AB has already provided $10.5 million to the Indian subsidiary in the nine month period ended December 31, 2013. The objective of this financial grant was to assist AstraZeneca Pharma India to establish its presence in the Indian market. Astrazeneca Pharmaceuticals AB holds 75 per cent in AstraZeneca Pharma India.
Besides, in a separate filing AstraZeneca Pharma India said its board will meet on March 5 to consider delisting from the BSE and the NSE.
AstraZeneca Pharma said it had received by email a letter from AZP AB Sweden, promoter of the company, proposing to make a voluntary delisting offer to the public shareholders from the BSE and the NSE. Reacting to the development, the drug firm’s scrip shot-up by 20 per cent to Rs.1,110.90 — its upper circuit limit which was also its one-year peak at the BSE. At the NSE, the stock soared by 20 per cent to touch its 52-week high of Rs.1,112.90.
