Biocon will pay off short-term loans worth $270 million using proceeds from Syngene stake sale

"We were not really looking at, as you said, in selling down additional stake in Syngene. But we were talking to various other private equities to raise funds and because we wanted to close the transaction quickly so that we could start the transition of the business and realize the benefits of that position we had to take on mezzanine financing in November."

"We of course are still in discussions with few private equity players and expect to raise funds directly at Biocon Biologics level to reduce the debt of $1.2 billion that was taken on for the acquisition financing. But to square off the debt in Biocon the mezzanine finance that we take on for $420 million we had no other option but to raise funds either by selling down Syngene or doing some structured finance of Biocon Biologics share at Biocon level."

When asked about selling another stake in Syngene, Mittal said that it was a part of their smart capital strategy. According to Mittal, monetising Syngene will provide more value compared to the embedded value it reflects in Biocon shares.  He further added that selling the stake will help reduce the debt and accrete shareholder value.

"While we continue to hold a majority stake, but when you really look at today how the shareholders of Biocon are valuing Biocon and the embedded value of Syngene within that valuation, we feel that we will have an accretion by reducing the debt by selling down that 10 percent So, cash definitely is better than the embedded value of the stock in Biocon," he said.