Orchid Pharma buys its bonds to save on interest cost

March 31st, 2009 - 5:47 pm ICT by IANS  

Chennai, March 31 (IANS) The city-based bulk drug manufacturer Orchid Chemicals and Pharmaceuticals has purchased $12.1 million worth of bonds from the market and is in the process of extinguishing them to save on interest costs.
This is the second such purchase in recent times by the company, which March 26 announced it had bought $25.7 million worth of bonds.

“The total bonds issued by the company is worth $200 million. We have bought bonds worth $40 million. We may buy more,” Orchid deputy managing director C. Bhaktavatsala Rao told IANS.

In a regulatory statement to the Bombay Stock Exchange, the company also said it could “purchase from the markets and extinguish additional bonds from time to time at its sole discretion”.

Rao said his company had raised funds through external commercial borrowings (ECB) to buy the bonds.

Declining to reveal the total value of the ECB, he added: “There will be interest savings for the company but it is difficult to quantify (the savings) now.”

For the 2007-08 financial year, Orchid paid a total interest of Rs.81.12 crore and Rs.61.47 crore in the first half of the current fiscal.

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