Although the private bid on Hindustan Antibiotics has been finalized in favour of the K P Pharmaceuticals Limited (KPPL), a joint holding entity of the Mumbai-based K P Sales and the US based K P Pharmaceutical Technologies Inc, the Board for Industrial Finance and Restructuring (BIFR) has called a fresh consensus meeting of the concerned parties next week.

The BIFR meeting is convened in the context of protest by the employees and the objections from the creditors on the hasty deal of the company. The Industrial Development Bank of India, which acted as the operating agency to facilitate the bid, will however send the proposal documents to the BIFR in a week, as it has failed to make a mutually agreed view on the deal among the parties concerned in the October 14th meeting.

The sources from K P Pharma confirmed that the deal is final and the Board has to just complete its stamping formalities. The IDBI sources, however, informed that since there is no consensus from the employees and the creditors, the Board has to give the final word on this now.

According to Harvinder Singh, managing director, KPPL, since his company's proposal to takeover the company involves Rs 5 crore as the initial fund infusion, it will bring in another Rs 25 crore into the company in the first month for revival purpose. Apart from this KPPL would pay off the out standing debts of the company, which includes the loan from government, banks and FIs. These liabilities, which will be completely paid off by March 2004, would cost them another Rs 125 crore, he said. The KPPL proposal also offers a VRS scheme for 500 employees of HAL with Rs 15 crore for which the initial payments will be used.

The KPPL managing director said that, by acquiring Hindustan Antibiotics, the company wanted to introduce some new products in the country which is based on the NDDS technology the US company is working on at present. He also said that soon after the initial payment of Rs 5 crore, KPPL would try to sell off the 70 acres surplus land of HAL. He said that though the entire assets including another 300 acres of land, 1000 official residences and the equity holdings in Hindustan Max GB and KAPL are also in the possession of the new management, it does not have any immediate plan to dispose these assets. "Instead, KPPL want to use the R&D facility of HAL to enhance the US company's research activities at the Indian cost and also to build up brand image of Hindustan Antibiotics," he said.

According to IDBI sources, the total assets of Hindustan Antibiotics is currently valued at Rs 800 crore in which the equity of HAL in HMGB and KAPL is excluded. However, KPPL sources quoted only Rs 500 crore as the value of total assets of the company.