The Industrial Development Bank of India (IDBI) has submitted a much-awaited revival package for Hindustan Antibiotics Ltd to the Board for Industrial and Financial Reconstruction (BIFR) last week. The board would formulate a rehabilitation package based on the same.
BIFR had set September 30, 2000, as the cut-off date for submission of the package.
In a recent hearing, the board said the rehabilitation plan would be circulated among Hindustan Antibiotics creditors to seek their opinion. It has directed the creditors to submit a detailed position of their dues on or before September 30 to the IDBI.
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However, IDBI officials were reluctant to divulge the details of the package.
Currently, Hindustan Antibiotics has an interest liability (arrears) of more than Rs 60 crore to its creditors such as the State Bank of India, Punjab National Bank and Bank of Maharashtra.
Apart from this, it has other contingent liabilities including loan amounts that have to be paid off immediately. In order to make the revival feasible, the company had earlier sought either total waiver of the interest or to allow at least a concession on the interest rate from its creditors.
Despite the keen interest of the central government and BIFR to give an immediate clearance to the rehabilitation, the company is still uncertain whether it will get the expected help from financial institutions in the form of interest concession, which was one of the suggestions forwarded to the IDBI by Hindustan Antibiotics management.
Though the company had conducted several round of talks with the State Bank of India (SBI) -- the major creditor of the company with Rs 42 crore -- to waive off the interest, it didn't bring any substantial change.
In addition to the help in the form of interest concession from the banks, the company was also expecting the accumulated lease rent from its joint venture Hindustan Max GB (HMGB) for using the penicillin G plant.
However, HMGB has not paid the lease rent for the last five years to HAL, nearly Rs 28 crore now, as the former has never performed better on the financial front due to mismanagement and various other adverse factors in the market.
At the recent hearing, BIFR has also directed the Hindustan Antibiotics management to enter into an memorandum of understanding with the workers for three years, covering inter alia payment of workers' dues, sacrifices to be made by workers, rationalisation of manpower and ensuring their cooperation for rehabilitation of the company.