Vivimed Labs, a supplier of specialty chemicals and pharmaceuticals products, witnessed a rise in share price on Wednesday after the company announced to divest a  division within its specialty chemicals portfolio to Clariant Chemicals (India) at an enterprise value of Rs 3.8 billion.

Clariant Chemicals (India) is a subsidiary of world's leading speciality chemical company, Clariant AG of Switzerland.

The company said, "Signed a definitive agreement for the transfer and sale of identified products along with the associated trademarks and assets within the speciality chemicals division, subject to requisite regulatory, statutory and shareholders' approvals."

"A major portion of the receipts will be used to reduce debts thereby saving substantial interest costs going forward. Furthermore, it will provide increased financial flexibility to pursue profitable growth across both its business segments with focus on growing pharmaceutical API and finished dosage forms businesses in regulated markets," it added.

Santosh Varalwar, MD & CEO, Vivimed Labs said, "I am pleased to announce an important strategic development at Vivimed. This transaction will help us significantly improve our financial flexibility for future growth. We are confident that this transaction, once completed, will position Vivimed optimally to move to the next level of growth, across its specialty chemicals and pharmaceuticals businesses."

The potential transaction was taken on board and forwarded for shareholders' approval in a meeting of the Board of Directors of Vivimed held on Sept. 12, 2015.

The part of the speciality chemicals division's business, which is proposed to be divested, accounted for about 10% of the consolidated revenue from operations in FY2015.

Shares of Vivimed Labs are trading at Rs 338.80, up Rs 11.1, or 3.39% at the Bombay Stock Exchange (BSE) on Wednesday at 10:29 a.m.

The scrip has touched an intra-day high of Rs 347.50 and low of Rs 335.00. The total volume of shares traded at the BSE is 83,241.