The private bidding for the BIFR referred PSU Hindustan Antibiotics is again back to BIFR as the proposals submitted by the Mumbai-based Sun Pharmaceuticals and the HAL Employees Union, Hindustan Mazdur Sangh (HMS), were found inappropriate and thereby rejected by IDBI, the operating agency.

However, the proposals have been deferred for a review by the BIFR and the government as per the suggestion put forward by deputy secretary- Ministry of Chemicals and Fertilizer, the government representative at the joint meeting called for the bid opening yesterday.

The bid documents, which were opened yesterday evening by the IDBI at a joint meeting involving the bidders, creditors, company management and the government representative, could not be considered for finalization as the proposals were not specific and agreeable to the concerned parties.

It may be recalled that when the private bidding was re-announced by the IDBI in December last year, there were only two bids considered valid out of five. The other three proposals were rejected outright as the parties could not comply with the terms and conditions. Though the Sun Pharma's proposal was expected to be accepted by the IDBI till the bid opening date it has been deferred for revision at the last moment as it did not specify actual schemes of the company to revive the PSU, it is learnt.

Sources said that the Sun's proposal has not specified the revival strategies as far as the production, management and employee retention/retrenchment schemes. In addition, its debt repayment scheme mentioned in the proposal was learnt to be not acceptable to the creditors. Sun had stated in the proposal that the debts and other liabilities will be paid back as per the liabilities estimated in 1997.

The sources informed that the asset valuation in the Sun Pharma proposal was also not based on actual market value. So the concerned parties including the company management were not agreeable to the terms. Sun's offer included a fresh fund infusion of Rs 243 crore for the revival and the repayment of the liabilities as the value of the company and its assets, which includes Rs 56 crore for the land.

However, the company sources said that the surplus land of the company itself would fetch more than Rs 100 crore as per the current valuation. So the valuation made in the Sun's proposal was very low and if the proposal is accepted as it is, the effective valuation for the PSU will be less than 50 per cent of the actual value, the sources added.