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Draft plan to revive Bharat Immunologicals

Richa Mishra

NEW DELHI, Feb. 21

A DRAFT rehabilitation scheme has been circulated for Bharat Immunologicals and Biologicals Corporation Ltd (Bibcol). Noting that there was a general consensus that the company could be rehabilitated, the Board for Industrial and Financial Reconstruction (BIFR) had asked Bibcol to submit its audited balance-sheet as on March 31, 1999, to IDBI, the operating agency (OA) and directed the OA to submit a report on it subsequently.

The OA submitted its report based on which the Board has since prepared a draft scheme for the revival of the company.

Bibcol, promoted by the Department of Biotechnology, Ministry of Science and Technology, was set up to manufacture 10-crore doses of oral polio vaccines per annum. The company has been incurring losses since inception.

The cost of the project was estimated at Rs 28.70 crore which escalated to Rs 37.70 crore due to time over-run caused by the frequent change in the scope of the project, delay in financial tie-up and receipt of mandatory certificate from the Central Drug Laboratory. The plant commenced commercial production from January 1, 1996, at a revised project cost of Rs 59.57 crore.

Based on the balance-sheet as on March 31, 1996, Bibcol made a reference to BIFR in 1997 for registration as a sick unit, which was rejected. Bibcol again made a reference to BIFR in December 1998 based on the company's performance as on March 31, 1998, when the accumulated losses of Rs 37.19 crore had eroded the entire networth of Rs 23 crore of the company.

The company has now submitted a proposal for rehabilitation. The total cost of the rehabilitation scheme is estimated at Rs 56.16 crore. The diversification plan includes activities for manufacture of vaccination for BCG, Hepatitis B, measles and tetanus toxoid. The cost of diversification is estimated at Rs 14.18 crore.

Further, the company proposes to have a one-time settlement of its dues with financial institutions and State Bank of India and State Bank of Hyderabad in respect to their term loans. The cut-off date will be March 31, 2000.

The Bench further stated that IDBI will be designated as the monitoring agency (MA). Bibcol will strengthen/restructure the management set-up to the satisfaction of BIFR and the MA.

Bibcol has been directed not to declare any dividends to its equity shareholders without the prior approval of BIFR and the MA during the rehabilitation period.