The Asset Reconstruction Company of India Limited (ARCIL), which has seized the assets of the Ahmedabad-based Core Healthcare under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, is in a dilemma as it is not able to find a suitable buyer for the company's facility.

Arcil had taken over possession of the land, manufacturing facilities for large and small volume parenteral and medical disposables and captive power plant located near Ahmedabad in October 2003, subsequent to a debt recovery notice to the company.

Though the major lenders to Core Healthcare including ICICI, IDBI, IFCI, who constituted a consortium and transferred the bad loan to Arcil, have heavily discounted the interest part on the Rs 1100 crore liability of the Core, the bankers consortium find it difficult to get an appropriate market value for the company, it is learnt.

According to company sources, the current liability of the company amounts to Rs 600 crore after the waiver of accumulated interest and other charges. However, Arcil sources fear that if they put the assets on a distress sale it will not even fetch Rs 400 crore. Also, unless the buyer is from the same line of business who takes it over for the purpose of using the manufacturing facility, Arcil can not get the realization as expected.

However, all the manufacturing plants are in operation following an arrangement between Arcil and the Core management to maintain the plant and machinery in usable condition. The sources from Core Healthcare said that the plants are working in almost full capacity with 1000 odd people are still in employment. The company is at present manufacturing large volume parenteral, small volume parental, medical disposables and emergency care products for institutional supply and has undertaken contract manufacturing for some major pharmaceutical companies.

The company sources added that the company even made an operational profit last year as the plant operation has been in full swing during the last one year.

According to market sources though Baxter and Fresenieus Kabi, the two multinational large volume parenteral manufacturers already present in India, are interested in the Core's facility. But the talks are still not progressing as uncertainty prevails over liabilities and settlements.