Why is HAL holding on Rs101-crore divestment?

For nearly seven months now, the beleaguered public sector drug manufacturer, Hindustan Antibiotics Ltd (HAL), has put on the sale of 13 acres of its prime land for Rs101 crore,even though it was authorised by the Board for industrial and financial reconstruction (BIFR).

About three years ago, the BIFR had authorised HAL to sell 20 of its 69 acre-land to raise funds to repay loans of approximately Rs200 crore.This was part of the effort to revive the ailing public sector company, which had been declared sick by the BIFR in 1997.

Accordingly, the asset sale committee of HAL had invited bids for the sale of 20 acres through tenders published on August 14, 2008, and September 7, 2009. Following poor response, fresh bids were invited in November 2010.

The area of land to be sold was also reduced from 20 acres to 13 acres as the remaining property had technical problems and could not be sold.

While the first bid received an offer of just Rs49 crore for 10 acres, the third attempt to raise revenue for HAL received a positive response with 30 firms showing interest.The highest bid offered was of Rs101 crore by a consortium of four land developers — three from Pune and one from Mumbai.

However, since then, the proposal to sell the land has been put on hold, without explanation. HAL’s managing director, AS Vaidya, refused to comment on the matter when approached by DNA.

Considering that HAL was expecting to raise Rs137 crore from the sale of 20 acres, company insiders said that the offer of Rs101 crore for 13 acres was viewed as fair and reasonable.

The land earmarked for sale has enormous commercial and residential value as it is in the heart of the Pimpri-Chinchwad industrial township with proximity to the Mumbai-Pune National Highway-4 and located 12 km from the IT Park in Hinjewadi.

As reported exclusively by DNA on Wednesday (‘Hindustan Antibiotics bleeds as drugs expire in godowns’, July 20), more than 40% of unsold antibiotics, valued at Rs21.79 crore, manufactured at HAL expired in the factory godowns itself, according to an audit conducted in the company in June.

This was even as the ailing firm, which is India’s first
public sector company in the drugs and pharmaceuticals sector, had pending dues of Rs19 crore since 2008.

A section of the company insiders suspects a deliberate attempt to kill the public sector firm through mismanagement and poor marketing efforts.

HAL documents in DNA’s possession show that drugs that have expired include Rs35 lakh worth of Haxime (100 mg & 200 mg), Rs32 lakh of Cepha (500mg), Rs18.86 lakh of Amox (500mg) and Rs15 lakh of Amphi (500 mg).