Wednesday, April 24, 2013

Trouble for Arch Pharmalabs - United Bank issues legal notice for repayment

It seems trouble for API companies in India is multiplying as we see more and more companies failing to repay their debts in time.  This time around it is Arch Pharma labs, which has been the darling of private equity investors and widely considered as one of the premium API companies in India. The United bank has slapped a legal notice on Arch pharma labs for recovery of its debts.

In the recent past we have seen many Indian API Players  failing to repay debt
The first debacle in the Indian API Industry was Surya Pharma, which had to shut down its plants and asked employees to leave. Ind-swift speculated as an acquisition candidate is also looking for corporate debt restructuring. Even Parabolic which came out with an IPO only a few years back (2010) is also looking for a CDR package. 

There are many more API companies which are likely to follow suit as the debt equty ratio looks heavily skewed and cash flows are not enough to service the debt

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