Elder Pharma Defaults on 261-cr Interest Payment on Debentures Mumbai-based co had received board nod for restructuring business in July

Elder Pharmaceuticals has defaulted on interest payment of . 261.8 crore on its debentures. The Mumbai-based company markets prescription pharmaceutical brands, surgical and medical devices. "The company has not paid interest due on three debentures totalling . 261.8 crore. It was also required to create complete security by February 19, 2013 on . 70 crore debenture," said a senior banker in the know of the development.  "The securities over the fixed assets of Andheri, Mumbai and North India have been created on November 19, 2012 and May 20, 2013, respectively. However, the security over the fixed assets of the issuer situated at Maharashtra is pending due to non–receipt of NOC from all the existing charge holders," the banker said.  Recently, the company elevated Alok Saxena as its MD and CEO. The appointment was done after the demise of Elder Pharma chairman and managing director Jagdish Saxena on October 10. "Our total debentures are about . 260 crore and therefore the interest due is about . 10 crore," an Elder Pharma official told ET on conditions of anonymity.  The company in July had received board approval for restructuring of the company's business through raising capital, hiving off of assets or other strategic options to reduce debt. The company has a debt of . 1,300 crore on its books. The street is abuzz that Elder Pharmaceuticals may sell its domestic business for around . 2,400 crore.  French multinational pharmaceutical company Sanofi is rumoured to have made the highest bid for the domestic formulation business of Elder Pharma, ahead of Pfizer and Glaxo. Paris-based Sanofi is understood to have bid for all the brands, valuing the Mumbai-based company at . 2,500-2,700 crore. Other contenders such as Glaxo have only shown interest in specific brands, said two official in the know of the development.  Net profit of Elder Pharmaceuticals has declined by 68.9% to . 6.78 crore in the quarter ended June 2013 compared to . 21.8 crore in the corresponding quarter last year. Sales have also declined by 27.7% to . 187.9 crore in the quarter ended June 2013, compared to . 259.9 crore in the corresponding quarter last year.