The Board of directors of Matrix Laboratories Limited has proposed to issue 35,00,000 equity shares with face value of Rs.2/- each at a price of Rs.225 per share (including premium) to the erstwhile promoters of Docpharma NV, Belgium.

The allotment to be made on preferential basis in accordance with the SEBI guidelines will fetch the company an amount of Rs. 787.50 Million and the same will be utilized to meet the corporate requirements. The preferential allotment of equity shares is subject to a 3-year lock-in period.

The interest shown by the erstwhile promoters of Docpharma to acquire shares of Matrix Laboratories at a premium to the current market price with 3-year lock-in period reflects the faith and commitment reposed by them in the Matrix Laboratories. It is also a reflection of Matrix's firm belief in partnership approach in utilizing the expertise of the core team of Docpharma.

The preferential offer is significant from the perspective of Matrix as well as the erstwhile promoters of Docpharma, who continue to play active role in spearheading the operations of the Docpharma even after it is acquired by Matrix Laboratories. Matrix expects to benefit from the rich experience of the erstwhile Docpharma promoters in the European markets and also through their equity participation in the company.

Subsequent to the preferential offer, the paid-up capital of the company will be increased to Rs. 306.44 million from the present Rs. 299.44 million. The dilution in the equity will be to the extent of 2.28 per cent.

The company has called for an Extra-ordinary General Meeting (EGM) on 19th December 2005 to seek the shareholders approval for the preferential offer.