Mumbai: The central government, which has decided to sell its 100 per cent holdings in Hindustan Antibiotics Ltd (HAL), has appointed Industrial Development Bank of India (IDBI) as the nodal agency for the sale of HAL stake.
HAL was earlier referred to the Board of Industrial and Financial Reconstruction (BIFR) as it was incurring losses during the past few years. IDBI will invite an expression of interest from potential bidders for the takeover of HAL.
The sale of the company will be without any of the liabilities it owes to different banks. The governments decision to sell off its entire holdings in HAL is based on the repeated failures of the rehabilitation packages introduced by IDBI.
Currently HAL has a total interest liability (arrears) of more than Rs 90 crore to different banks apart from the other contingent liabilities, including loan amounts that have to be paid off immediately. The major lenders to the company include: State Bank of India (SBI), Punjab National Bank, Bank of Maharashtra and Canara Bank.
Last year BIFR had asked HAL to dispose of its huge real estate of around 70 acres in Pune to reduce its financial burdens. But HALs efforts to sell the properties failed to take off due to the difference of opinions on price between the company management and the interested parties.
Though the company held several rounds of talks with SBI, the major creditor of the company, to waive off interest and loan amounts, SBI turned down HALs plea. HAL owes over Rs 42 crore to SBI.
As a part of the survival exercise, HAL leased out its five streptomycin plants to RPG Life Sciences for the production of vitamin B1 and B2. HAL, which was declared sick in 1995, had submitted its first rehabilitation package prepared by IDBI as the operating agency to BIFR in 1998.
Though the total contingent liability of the company, according to this package, was Rs 120 crore, it has come down to less than Rs 100 crore currently. This was because the company has shown substantial improvements in financial performance over the last three years following its strict cost-cutting exercise and aggressive marketing.