Hind Antibiotics pegs recast on land disposal

Geeta Nair

Pune, May 16: HINDUSTAN Antibiotics Ltd (HAL) is banking heavily on the disposal of surplus land for the financial restructuring of the company. HAL has been a BIFR case since March 1997. Under the rehabilitation plan, 66 acres near its Pimpri Plant have been identified as the major asset that can be disposed off.

Apart from concessions, HAL needs Rs 90 crore of additional funds for revival. Company officials hope to generate “maximum amount” from this asset to retire the high interest debt and are awaiting the Board for Industrial and Financial Reconstruction (BIFR) clearance and nod from the cabinet committee to set the ball rolling.

The Pimpri Chinchwad Municipal Corporation is among the institutions that have evinced interest in picking up land. As of now HAL’s annual interest burden alone is Rs 20 crore. Borrowings at high interest rate and inability to retire the high cost debt were among the reasons for piling up losses at the company.

Among its lenders are a SBI-led consortium of six banks which funded working capital loans while the long term-funds came from Canara Bank, IDBI, ONGC, Sicom and through bonds.

Another proposal in the pipeline is to convert the government loans into equity. The share capital (paid up) of HAL is Rs 45 crore and this could go up by another Rs 42 crore if the government accepts the loan conversion proposal, company officials said.

Meanwhile, HAL has achieved the manpower target, set under the rehabilitation package, by bringing down employees from 2,876 to 2,036. Of this, 470 employees have been seconded to Hindustan Max-GB venture and 137 are being seconded to the RPG Life Sciences plant. The ten fermenters, too, have been leased to HMGB and RPG.