Kilitch Drugs India524500Strategic exit plan
Board approves divestment of 100% stake in Ethiopian material subsidiary, conversion of INR 57.00 Crores debt
Board approved sale of the entire 100% shareholding in Kilitch Estro Biotech PLC (Ethiopia) to HarmeeCare Pharmaceuticals, a state-owned enterprise of the Oromia Regional State.
By ScoutQuest · · 3 min read
- Aggregate buyer consideration
- USD 14,000,000
- Consideration due to the company
- USD 12,855,000
- Debt-to-equity conversion
- up to INR 57.00 Crores converted into 1,66,472 equity shares at Rs. 3414 per share
Divestment of the Ethiopian subsidiary
- The Board approved selling, transferring and otherwise disposing of the company's entire shareholding in Kilitch Estro Biotech PLC (KEB), a material subsidiary registered in Ethiopia, to HarmeeCare Pharmaceuticals.
- HarmeeCare Pharmaceuticals is a state-owned public enterprise established under the laws of the Oromia Regional State of the Federal Democratic Republic of Ethiopia. It does not belong to the promoter, promoter group or group companies.
Deal size and timing
- Aggregate consideration payable by the buyer for 100% of KEB, and to enable KEB to discharge its existing debts and liabilities, is USD 14,000,000.
- Out of that, the consideration due to the company is USD 12,855,000 (shown in the annexure as USD 1,28,55,000).
- Binding minutes of meeting setting out the key terms were signed on 22 October 2026; the share purchase agreement and other transaction documents will be signed in due course.
- Expected date of completion of the sale is 31 January 2027.
What KEB contributes today
- Turnover of KEB for FY 2025-26 was 47.57 crores, which is 20.20% of the consolidated turnover of 235.47 crores.
- Net worth as on 31 March 2026 was (8.43) crores, a negative net worth, equal to (3.14)% of consolidated net worth of 267.87 crores.
- KEB operates a Cephalosporin manufacturing plant in East Africa.
Debt-to-equity conversion before the sale
- Outstanding debt including service cost extended by the company to KEB, aggregating up to INR 57.00 Crores, is to be converted into equity shares of KEB.
- This is 1,66,472 equity shares at Rs. 3414 per share, issued as consideration other than cash.
- Indicative time period for completion of the conversion is 30 December 2026. No governmental approvals are required for the conversion, and the company will comply with FEMA updates and reporting.
- Because KEB is a material subsidiary, the conversion is a related party transaction under LODR; the promoter and promoter group hold interest only to the extent of being such a subsidiary.
- The conversion is being done prior to the entire divestment, as required under FEMA and the overseas investment rules.
Approvals needed
- The sale is outside a scheme of arrangement, and member consent is being sought under Regulation 37A of LODR; the transaction is subject to receipt of that approval.
- The company states that the sale does not fall within related party transactions and is at arm's length.
Board changes approved at the same meeting
- Dr. Milind Kishor Madhani (DIN 02378529) appointed as Additional Director (Non-executive, Independent) for a period of 5 years with effect from 23 October 2026.
- Mr. Gautam Rajan (DIN 00060730) appointed as Additional Director (Non-executive, Independent) for a period of 5 years with effect from 23 October 2026.
- Both appointments are subject to member approval at the ensuing EGM, and Mr. Deep Shukla and Associates, Practicing Company Secretary, is appointed scrutinizer for the EGM voting process.
How to read this
- The company is exiting a subsidiary that carried a negative net worth of (8.43) crores, against a consideration due to it of USD 12,855,000.
- A large part of what KEB owes the company, up to INR 57.00 Crores, is first turned into shares, so the stake being sold includes those shares.
- Both the conversion and the sale depend on the approvals and timelines set out above, so completion is not immediate.
Also from Kilitch Drugs India
EGM on 16 Nov 2026 to vote on sale of entire stake in Ethiopian subsidiary, debt conversion, 2 director appointments
23 Oct 2026
Kilitch Drugs to divest Ethiopian subsidiary Kilitch Estro Biotech to HarmeeCare for US$14 million; plans new Pen facility
23 Oct 2026
More numbers
- Aggregate consideration payable by buyer for 100% of KEBUSD 14,000,000
- Consideration due to the company from the saleUSD 12,855,000
- Outstanding debt including service cost to be convertedINR 57.00 Crores
- KEB turnover FY 2025-2647.57
- KEB turnover as % of consolidated turnover20.20
- KEB net worth as on 31 March 2026(8.43)
- Equity shares issued on conversion1,66,472 equity shares
- Price per share on conversionRs. 3414 per share
Source: BSE · 23 Oct 2026
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