IDBI may bid again for strategic sell-off of Hind Antibiotics
By In a recent meeting with | 11 Jan 2003
Mumbai: Industrial Development Bank of India (IDBI) may bid again for the strategic sell-off of Hindustan Antibiotics Ltd (HAL), a public sector pharmaceutical company.
In a recent meeting with IDBI and the ministry of chemicals and petrochemicals, the Board for Industrial and Financial Reconstruction (BIFR) has directed the operating agency to rebid for HAL. BIFR was forced to take the decision as it does not find the offers under the previous bid attractive, sources said.
Following the open bid in June 2002, two companies - the KP Sales Group and Thombre Group - had placed bid for the PSU. KP's offer was rejected outright as the valuation was found unacceptably low. Thombre's Rs 177-crore offer didn't get through because HAL couldn't furnish the audited balance for the year 2001-02.
The government's equity in this pharma PSU is estimated at Rs 44 crore, as per the book value. Though HAL started showing improvement with its cash losses in 1998-99, decreasing by more than two-thirds, the government is keen to move out of HAL, the sources add.
The government had asked BIFR to proceed with a change of management in HAL, the first public sector company in drugs and pharmaceuticals, under the SIA Act early this year in view of the policy to move out of all non-strategic sectors.
The new promoter will have to settle the outstanding liabilities amounting to around Rs 65 crore.
Including the value of fixed assets and the pharmaceutical and veterinary brands in its kitty, HAL is valued at Rs 750 crore. HAL has been incurring losses since 1993-94 was referred to BIFR in January 1997 and BIFR formally declared it sick on 31 March 1997. BIFR has appointed IDBI, Mumbai, as the operating agency for a techno-economic viability and report.