ARCIL finalises buyer for Core Healthcare

The Asset Reconstruction Corporation of India Ltd (ARCIL) finally seems to have finalised a buyer for the assets of Ahmedabad-based Core Healthcare Ltd, which are up for grabs at its facility in Ahmedabad. An announcement in this regard is expected on Thursday.

Although no confirmation was available on the company which is expected to buy out the properties of Core, German multinational Fresenius and US-based Baxter could be the likely companies which might pick up the intravenous fluids (IV fluid) facility of Core.

Core was a leading IV fluid manufacturer of the country before it ran into roadblocks. The other companies which had earlier shown interest in Core properties included Ahmedabad-based Zydus Cadila Healthcare.

Core Healthcare has to cough up over Rs 650 crore as principle loan amount to various banks including State Bank of India, ICICI Bank, IDBI Bank, apart from huge interest payments pegged at over Rs 1,000 crore to be recovered by the consortium of banks.

Almost a year ago, in January 2004, ARCIL took over assets of Core at a discount of around 40 per cent and since then, it has been scouting for buyers among interested pharmaceutical companies and especially in companies specialising in IV fluids manufacturing.

The total plant area is over 700 acres and the IV fluid plant itself is constructed over 25 lakh square metres apart from other manufacturing facilities in the same campus. There is also a captive power plant with 65 mw capacity.

It is learnt that the facilities in Core's Sanand plant including the entire manufacturing line of IV fluids, are still operational and are being used for Core's institutional sales for which the company had earlier signed contracts with buyers including government organisations.

ARCIL has State Bank of India (SBI), ICICI Bank and IDBI Bank as major stakeholders, each holding 24.5 per cent stake while HDFC and HDFC Bank hold 10.6 per cent stake and other private banks holds 15.9 per cent stake.

Core Healthcare, promoted by Sushil Handa, ran into troubles in the mid nineties, and with uncertainty looming large over any revival possibility, the company was sent to the Board of Industrial and Financial Restructuring (BIFR). It was only earlier this year that ARCIL put its assets for sale.