BIFR for Gujarat Lyka, Sun Pharma merger

A techno-economic feasibility study of Gujarat Lyka had made it clear that the company was not viable on a stand alone basis and direct involvement of Sun Pharma, which holds 58 per cent stake in the company, was an immediate and result-oriented alternative, the bench said. It asked Gujarat lyka to submit a revised rehabilitation proposal based on the merger proposal with means of finance fully tied up to ICICI. A draft rehabilitation scheme based on the merger proposal might be circulated without further hearing after getting the report from ICICI, the bench observed.

Sun Pharma, which acquired controlling stake in Gujarat Lyka, has also made an open offer to acquire upto 20 per cent stake held by the public in the sick company. Sun pharma had inducted Rs 7.5 crore in Gujarat Lyka after acquiring majority stake. However, even after the induction of fresh funds, the networth of Gujarat Lyka remained negative. The merger proposal is based on a techno-economic feasibility study of the company by GITCO.

The board also made it clear the income tax benefits to the tune of Rs 8.51 crore accruing to Sun Pharma should be utilised for revival of Gujarat Lyka and repayment of dues of institutions and banks. ICICI has been asked by the board to appoint a reputed consultant to work out the share exchange ratio for the merger.