GlaxoSmithKline Pharmaceuticals, the Indian unit of British drug giant GSK Tuesday said it expected to close the sale of its 60-acre land parcel in Thane, Maharashtra by the end of December.
The company said it has received 5-6 bids from prospective buyers and the property committee set up by the board is evaluating the bids.
“We are trying to extract the maximum value,” said Deepak Parekh, chairman of GlaxoSmithKline at company’s annual general meeting.
In 2012, GlaxoSmithKline closed its factory located on the land that housed an active pharmaceutical ingredient manufacturing unit. The plant had been functional since 1961.
The sale of Thane land could fetch the company around Rs 1,500 to 1,600 crore.
“It’s an industrial land so there is a fair amount of payment to be made for conversion from industrial to residential,” Parekh said.
Selling the land parcel in Thane hasn’t been easy for GlaxoSmithKline due to numerous government clearance issues including urban land ceiling (ULC) clearance, conversion from industrial to residential land, labour NOC (no-objection certificate), among others.
In April the Mint newspaper reported GlaxoSmithKline cancelled bids to sell its Thane land parcel for around Rs 1,500 crore, quoting sources. That was the second time it scrapped the sale, after attempting it first in 2014.
“Large Mumbai builders including Oberoi Realty, Piramal Realty and Wadhwa Group were interested in the plot, but the deal, considered one of the largest in value terms in the last three years, failed as buyers, wary of pending government permissions, were not willing to pay what GSK wanted,” Mint went on to say quoting its sources.
The company said sale of its 80-acre land parcel in Bengaluru could take a hit, if the government goes ahead with proposed green zone implementation in that area.
“We understand from the local government that they are trying to make it a free zone or green zone, in which case we don’t get any value,” Parekh said, adding, “So we are still working with the government."
Currently, the company is working on the remediation of the land. “It still take couple of years before we can sell if the government gives us permission,” Parekh said.
The Bengaluru property is expected to fetch the company anywhere between Rs 1,200 – Rs 1,500 crore.
GlaxoSmithKline is investing Rs 1,000 crore in a new state-of-the-art pharmaceutical factory in Vemgal, Karnataka, which is expected to be completed by end of 2018. The facility when completed will produce more than 8 billion tablets and 1 billion capsules per year.
GlaxoSmithKline has earlier sold its properties in India including office premises at Cunnigham Road in Bangalore to Dawat-E-Hadiyah Trust of Mumbai, for a consideration of Rs 23.10 crore.
The company had sold another plot at Worli in Mumbai for Rs 107.60 crore to I-Ven Realty in 2004.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
