A process for producing oganomycin E from cephamycin compound by the action of an esterase is disclosed. The cephamycin for reaction may be provided in situ bacterially. Esterase activity is provided by yeast of genus Torulopsis or by an esterase derived from the yeast. Type strain Torulopgis sp. YE-08907L is described as representative of a yeast having the characteristic enzymic esterase activity.