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EX-31.2 - EXHIBIT 31.2 - Cadista Holdings Inc.v234369_ex31-2.htm
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10-Q - FORM 10-Q - Cadista Holdings Inc.v234369_10q.htm
v2.3.0.11
BORROWINGS
3 Months Ended
Jun. 30, 2011
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]
6
BORROWINGS

   
June 30, 2011
(000’s)
   
March 31, 2010
(000’s)
 
Long term Borrowings
  $ -     $ -  
Current portion of Long term debt
    996       1992  
Short term borrowings
    5,065       4,853  
Balance at the end of the period
  $ 6,061     $ 6,845  

 
The Company has a term loan and revolving credit facility provided pursuant to a Credit Agreement (as amended, the “Credit Agreement”) with State Bank of India, New York Branch and Bank of Baroda entered into in September 2006, which agreement has since been amended. Term loans under the Credit Agreement bear interest at the rate of six month LIBOR plus 1.65% and are secured by all other assets of Jubilant Cadista Pharmaceuticals Inc. not securing the “Revolver” (as defined below). The terms of the loan arrangement contain certain restrictive covenants, and covenants relating to certain financial ratios. The Company paid the next to last installment of $1,000 of the term loan in April 2011.  The last installment of $1,000 is due in October 2011.

Jubilant Cadista Pharmaceuticals Inc. obtained a Revolving Credit Facility (“Revolver”) to meet its working capital requirements. The original maturities of these loans are less than one year and the loans bear interest at the rate of 6 months LIBOR plus 2.75%. As of June 30, 2011 and March 31, 2011 the outstanding short term loans aggregate to $5,065 and $4,853 respectively. The Revolver is secured by all of Jubilant Cadista Pharmaceuticals Inc.’s goods and inventory, accounts receivable, contract rights and current assets. The Revolver is guaranteed by Cadista Holdings Inc. Jubilant Pharma Pte Limited (the direct beneficial owner of over 50% of our outstanding common stock) has pledged its stock of Cadista Holdings Inc. to secure Jubilant Cadista Pharmaceuticals Inc.’s obligations under the Credit Agreement. The guarantee of Cadista Holdings Inc. is secured by a pledge of stock of Jubilant Cadista Pharmaceuticals Inc. held by Cadista Holdings Inc. In connection with the amendment of the Credit Agreement in February 2010 which increased the maximum amount under the Revolver from $3,000 to $6,500, State Bank of India, Corporate Accounts Group, New Delhi, India Branch (“SBI CAG”), with whom Jubilant Life Sciences Limited (the indirect beneficial owner of over 82% of our common stock) (“Jubilant”) has a credit facility, issued a letter of comfort (the “Original Letter of Comfort”) in favor of State Bank of India, New York Branch (“SBI NY”) providing for the following: (i) that the security for Jubilant’s credit facility with SBI CAG would not be released so long as any liabilities of Jubilant Cadista Pharmaceuticals Inc., to SBI NY, including amounts under the Revolver, remain outstanding; and (ii) SBI CAG‘s obligation to indemnify and hold SBI NY harmless, and pay any claim submitted by SBI NY arising from a default by Jubilant Cadista Pharmaceuticals Inc., for up to $3,500 principal amount of loans funded by SBI NY under the Revolver, together with accrued interest thereon and other fees and commissions arising under the Credit Agreement. The Original Letter of Comfort expired on March 31, 2011, and was replaced by a similar letter of comfort (the “Replacement Letter of Comfort”) issued by SBI CAG in favor of SBI NY on April 21, 2011. Upon the expiration of the Original Letter of Comfort until the issuance of the Replacement Letter of Credit, the maximum amount of the Revolver was reduced by $1,500 from $6,500 to $5,000 and Jubilant pledged $2,000 of collateral to SBI NY to secure the Revolver. The terms of the Revolver contain certain restrictive covenants, mainly the requirements to maintain certain financial ratios and distribution of dividends. The unused Revolver as of June 30, 2011 and March 31, 2011 aggregates to $1,435 and $147 respectively.

The details of average loan outstanding, average interest expense and weighted average rate of interest and interest rate on the balance sheet date is as follows:

Period ended
 
Average loan
outstanding during
the period (000’s)
   
Average interest expense
during the period
(000’s)
   
Average
interest rate
during the
period
   
Interest rate as of
June 30
 
June 30, 2011
  $ 4,956     $ 39       3.21 %     3.21 %
June 30, 2010
  $ 4,745     $ 50       4.15 %     4.15 %