Financial Daily from THE HINDU group of publications
Tuesday, Aug 10, 2004
Industry & Economy - PSU
Rs 115-cr revival plan proposed for Hind Antibiotics
New Delhi , Aug. 9
The board of ailing Hindustan Antibiotics Ltd has submitted a Rs 115-crore revival package to the Government involving fresh capital infusion and one-time settlement of dues of financial institutions.
The Department of Chemicals and Petrochemicals is currently examining the plan and will finalise its stand by the end of the month, officials said.
"According to the plan submitted to the Government funds would be generated through a mix of fresh infusion of funds by the Ministry, seeking of waiver from financial institutions as well as generating internal funds by selling off surplus land," officials said.
After the department finalises its views on the company's revival plan, it will invite comments from the other Ministries concerned, including the Ministry of Finance. Subsequently, the matter will be referred to the IDBI.
"Only after IDBI, which is the operating agency for this company, approves of the revival package can Hindustan Anitbiotics be brought out of the Board of Industrial and Financial Reconstruction (BIFR) net," sources said.
The Common Minimum Programme (CMP) of the present United Progressive Alliance (UPA) had clearly stated that the Government would try and revive some of the ailing public sector units (PSUs).
In fact, the Finance Minister, Mr P. Chidambaram, had in his Budget speech also stated, "HAL will be given financial support for restructuring."
Earlier, the Minister for Chemicals and Fertilisers, Mr Ram Vilas Paswan, had estimated that the company would need around Rs 70 crore for revival and it already has land worth Rs 40 crore.
Hindustan Antibiotics is one of the oldest PSU companies, which was set up by the first Prime Minister of India, Mr Jawahar Lal Nehru, after he realised that Mahatma Gandhi's wife Kasturba Gandhi died due to non-availability of antibiotics.
Subsequently, the company started making losses and has been under the BIFR fold since March 31, 1997.
The BIFR had invited private companies to bid for the sick unit and Sun Pharmaceuticals had submitted a rehabilitation plan.
With the change in Government policy, the Mumbai-based company decided to pull out of the race.
The success turnaround of HAL will pave the way for other such proposals. The Government recently set up a technical committee for looking into the rehabilitation of Indian Drugs and Pharmaceuticals Ltd.
Hindustan Organics and Chemicals Ltd, another PSU under the Chemicals and Fertilisers Ministry is also in the red.
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