TEVA, being the major importer of bulk drugs and intermediates from the country, which accounts for about Rs 250 crore per annum. SOL had earlier entered into supply agreements with the Israeli drug company and obtained interest-free advance of $2.5 million against the supplies of sulphamethaxazole in April 1997.It is understood that the joint-venture company is expected to produce the products exclusively as required by TEVA and also procure the required bulk-drug raw material supplies through the proposed company. Further, the joint-venture company would be accorded "preferred supplier" status by TEVA. According to a company estimate, the new company could make an initial business turnover of Rs 100 crore.
Earlier, SOL had been reported to the BIFR during 1997 since over 50 per cent of the networth of the company got wiped out. For the fiscal ending March 1998, SOL's networth has fully eroded, with accumulated losses mounting to Rs 166.52 crore.
For the six-month period ending March 1998, SOL hasincurred a loss of Rs 99.50 lakh on a sale of Rs 14.36 crore. The networth of the company as on 31st March 1998 is reported at Rs 102.20 crore.
According to a report, the SOL management had put in efforts to improve the affairs of the company. It had initiated the re-engineering process like:
mobilised funds to the tune of Rs32 crore under Alday Cash Bonds Scheme and used the funds to regularise the bank accounts; to meet the working capital requirements it had obtained a foreign currency loan of Rs 10 crore from IDBI during 1996-97; it had raised funds to the tune of Rs 17 crore, after selling two of its successful brands--Riflux and Clamp--during 1997 and liquidated high-cost private borrowings; an interest free advance of Rs 10 crore from TEVA Pharmaceuticals Industries Ltd Israel, which was retained by the banks to regularise the overdrawn accounts; As per the strategic decision took earlier by the company to license the registered formulation brands to other manufacturersfor their marketing could not yield anticipated results. The non-availability of medicines in the market has led to down-fall in the brand image of the company and resulted in the reduction in the prescriptions of the licensed drugs, said the company report. Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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