Strides Arcolab has entered into an agreement with GMS Holdings (GMS) whereby GMS will invest $21.90 million for a 25.1 per cent stake in Stelis Biopharma Pvt. Ltd. (Stelis), the biotech arm of Strides, to fund its greenfield project.
The transaction is expected to close in the fourth quarter of 2014, and is subject to requisite approvals.
According to a company release, Strides has invested $16.9 million in Stelis to date. Strides and GMS will invest $61.9 million, taking the total equity investment in Stelis to $78.8 million.
GMS will invest $8.5 million for a 25.1 per cent stake in Stelis on closing at a premium of 50 per cent of the current equity investment by Strides.
Further equity infusion of $40 million by Strides and $13.40 million by GMS will be made in tranches based on project and product development needs over a period of 2 years, in proportion to their ownership at par, the release says.
Stelis also has in place a project credit line of $40 million. With the total equity infusion of $78.8 million and credit line of $40 million, no further funding will be required till commercialisation, the release adds.
