The funds will be used to refinance a large part of the $1.2-billion debt raised for the acquisition of Viatris Inc.’s biosimilars business, said the sources cited above.
Recently, the senior management of the company met with investors in Singapore and Hong Kong. Biocon has indicated plans to raise between $900 million and $1 billion with a term exceeding five years, said one of the sources mentioned above, although others are unsure about the fundraising timeline.
Biocon Biologics chief executive and managing director Shreehas Tambe last month told ET that the company is exploring ways to reduce finance costs by optimising debt repayment timelines and interest rates.
A Biocon spokesperson declined to comment. Also, a Standard Chartered spokesperson declined to comment, while HSBC did not respond to requests for comment.
The company has already prepaid $250 million of the $1.2 billion acquisition loan, as reported by ET in July. The bond has not yet received its rating, which will determine the pricing.
Biocon is also facing a $335 million payment to Viatris shareholders in FY25, including $175 million tied to an option to acquire biosimilar Aflibercept. It added that it is in a comfortable position to make the balance $160 million payment.
The company has been making efforts to reduce acquisition-related debt due to high cost.
In February 2023, Kotak Special Situation Fund invested ₹1,070 crore in Biocon Ltd to support the acquisition, followed by a ₹500 crore investment by Edelweiss in non-convertible debentures. It had explored raising ₹4,500 crore through NCDs but have not made any progress on it.
Biocon remains committed to reducing debt through various avenues, including debt, equity, and hybrid options, the management had told investors in earnings call recently. Despite manageable debt servicing, high interest costs continue to pressure profitability, with net profit margins at 7% for FY24.
Biocon holds a 70% stake in Biocon Biologics, while Viatris owns 14%. The acquisition of Viatris’ biosimilars business added $1.2 billion in debt, with total obligations reaching ₹4,800 crore starting FY26.
Biocon Biologics contributed 57% of Biocon’s consolidated revenue in FY24, generating ₹8,824 crore of the company’s total ₹15,621 crore.