Orion Pharma borrows $34m from Germany for expansion

Orion Pharma has recently signed a deal with Germany's leading private lender BHF-Bank to borrow over $34 million (Tk 270 crore) to partially finance the purchase of a new plant and machinery to expand its existing production facilities.

The interest rate for the loan will be LIBOR plus 2.15 percent, officials of Orion said yesterday.

Presently, US dollar LIBOR for 12 months stands at nearly 1.74 percent.

So, the aggregate interest rate for Orion would stand at less than 4 percent, much lower than over 10 percent for term loans in Bangladesh.

However, the lender will take management and commitment fees from the borrower.

“We will expand our capacity to produce biotechnology, hormone and anti-cancer products,” Salman Karim, managing director of the company told The Daily Star.

“The loan is much cheaper and it will help us add value to our company's goodwill,” said Karim.

Orion has set a target to launch the new products within a year, he said.

The German lender has given Orion five years time to repay the loan, excluding two years of grace period. The loan will be paid in 10 equal and consecutive semi-annual payments.

The loan agreement signed on December 7 last year got go-ahead from Bangladesh Investment Development Authority on Wednesday.

Orion Pharma made the disclosure in the stockmarket yesterday as it is a listed company. Each share of the company that has paid-up capital of Tk 234 crore was traded at Tk 53.2 in Dhaka Stock Exchange yesterday.