Kilitch Drugs to Divest Entire Stake in Ethiopian Subsidiary for $14 Million

Pharmaceutical firm Kilitch Drugs (India) Ltd has entered into an agreement to divest its entire shareholding in its Ethiopian subsidiary, Kilitch Estro Biotech PLC (KEB), to HarmeeCare Pharmaceuticals, an Ethiopian State-owned enterprise, for a total consideration of $14 million.

According to the company, the transaction forms part of its broader corporate strategy to optimise its business portfolio, strengthen its financial flexibility, and reallocate capital towards higher-growth opportunities within India. The proceeds generated from the divestment will be directed towards reducing existing borrowings, lowering overall finance costs, and supporting the phased expansion of its new manufacturing facility located at Pen in Maharashtra.

Bhavin Mehta, Whole-Time Director at Kilitch Drugs (India) Ltd, stated that the strategic divestment allows the company to unlock capital and strengthen its balance sheet while accelerating domestic expansion plans. He noted that the phased rollout of the new Pen facility presents opportunities to leverage manufacturing expertise, scale up in emerging therapy segments such as GLP-1, and expand the company's footprint in international regulated markets.

Building on its existing capabilities in aseptic manufacturing, Kilitch Drugs intends to utilize the Pen facility to produce liquid injectable vials, lyophilised (freeze-dried) injectable vials, and ophthalmic eye drops. The company also plans to develop and manufacture GLP-1 (Glucagon-Like Peptide-1) therapies, positioning itself to cater to the segment as patents for key molecules expire across international markets. Additionally, the company aims to pursue EU GMP (European Union Good Manufacturing Practice) and PIC/S (Pharmaceutical Inspection Co-operation Scheme) accreditations to facilitate entry into regulated export markets.

To maintain its commercial footprint in the region, Kilitch Drugs will enter into a long-term supply and technical services agreement with HarmeeCare Pharmaceuticals. This arrangement is designed to support the continued operations of the Ethiopian manufacturing facility while facilitating an ongoing commercial relationship.

The completion of the transaction is targeted for January 31, 2027. The agreement remains subject to the receipt of necessary shareholder approvals, compliance with applicable regulatory requirements, and the finalisation of transaction documentation.

"This divestment represents a clear strategic shift towards consolidating operations and strengthening the balance sheet by shedding non-core international assets. By redirecting capital into domestic manufacturing and high-margin segments like GLP-1 therapies, Kilitch Drugs is positioning itself for scalable growth in regulated markets. For growing enterprises, optimizing capital allocation by pruning subsidiaries to fund core competencies is a prudent approach to long-term financial stability." — Dr. Shishir Gupta, Founder & CEO, StartupLanes