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DSQ Biotech to demerger mfg co

Our Bureau

CHENNAI, Nov. 22

THE board of directors of DSQ Biotech Ltd at its meeting here today decided to demerge its manufacturing and biotech operations into two companies.

Announcing the move, Mr Dinesh Dalmia, Chairman, said the demerger would enhance shareholder value. The manufacturing company will focus on agro-based high value products, and will rope in a strategic partner with expertise in bulk grain trade. The biote ch unit will focus on research and services in genomics and biomedicine, and later enter plant biotechnology.

Pending statutory approvals, the finer points of the demerger, including share allocation will be worked out by an investment banker to be identified shortly, he said. At present, the promoters hold 52 per cent, Deutsche Bank and Societe Generale about 2 1 per cent and the balance is held by the public.

The manufacturing company, which will have the grain processing facility at Cuddalore, involves a total investment of Rs 300 crores. The company has invested Rs 180 crores, and the balance will be ploughed in over the next six months, he said.

In the first phase, the unit will process about 800 tonnes grains per day. It will produce 60,000 litres potable alcohol, and other niche products such as wheat gluten and sorbitol.

The biotechnology company will focus on contract research and aim at churning out patentable products, he said. For research and IPR, the biotechnology company will have a wholly-owned subsidiary. This subsidiary will also offer equity to research instit utes in India. It will tie-up with universities and research institutions, and catalyse commercialisation of laboratory scale technologies. DSQ plans to keep this company debt-free, and target NASDAQ listing in 2002. This is to exploit the favourable mar ker perception that biotech companies enjoy in the US, he said.

Mr Dalmia said that the demerged companies would offer stock options to its employees. He anticipated that the demerger would take place by April next year.

Pic.: Mr K. Gopalakrishnan, Managing Director, and Mr Dinesh Dalmia, Chairman, DSQ Biotech Ltd at a press conference in Chennai on Wednesday.

Picture by Bijoy Ghosh