Ireland’s Perrigo said to be looking to shed API plant in India to reduce debt

Ireland-based drugmaker Perrigo put its API plant in Ambernath, India, on the block earlier this year to reduce its growing debt, sources told RealMint.

The facility, which has a capacity to manufacture about 600,000 tonnes (661,000 U.S. tons) of API a year, is the only production plant Perrigo owns in India. The value of the plant, which is an FDA-approved facility, is about $30 million, according to RealMint.

Though it has sparked some interest since being shopped around about eight months ago, a deal has yet to be reached.

Perrigo acquired a majority stake in the plant for $11.5 million in cash in 2009, then shelled out an additional $7.2 million to own the facility outright two years ago.

“Valuations and limited interest in the industry to expand API capacities could be the possible reasons for the delay in the sale of the asset,” a source told the online publication.

The company, which previously announced it would shutter the plant by the end of the year, has reported long-term debt of about $5.65 billion that weighs heavily on Perrigo’s operations.

Increasing competition in the API market from manufacturers in India, China and Europe has spurred other drugmakers to sell their plants. Swiss drugmaker Novartis has put its facility in Turbhe, India, up for sale and has said it will close the plant by December.

A year ago, Pfizer sold its Thane plant to Vidhi Research and Development for $27 million, and India’s Torrent Pharmaceuticals bought Glochem Industries' API unit in Visakhapatnam earlier this year for an undisclosed amount.

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