ADDITIONAL INFORMATION ON CORE HEALTHCARE LTD
Tuesday, October 25, 2005
  DID ARCIL SELL CORE PHARMA FOR A SONG ?
Article In Financial Express


Did Arcil sell Core Pharma for a song?
Jyotsna BhatnagarJyotsna Bhatnagar
Ahmedabad, Oct 24

Even as the Asset Reconstruction Company of India Limited (Arcil), ailing Core Pharmaceuticals Limited (CPL) and Nirma file an application in the Gujarat High Court for a formal demerger in the next day or two, a penultimate step towards making Nirma the owner of CPL’s facility, doubts are already being cast over whether it has been a distress sale of assets of a large defaulter by Arcil.

According to sources close to the deal, while Nirma is offering Rs138 crore for the assets as the cash component of the transaction, the additional liability amounts to another Rs 80 crore. The offloading of promoters shares of around 50% to the banks and FIs would mop up another Rs30-50 crore. The total deal would net around Rs260-270 crore.

However, pharma experts say that this tantamounts to a distress sale given the fact that setting up a similar plant today would cost nothing less than Rs 700 crore.

Even though the machines installed at the CPL facility are old now, the technology is still relevant and by that yardstick, the assets should have comfortably fetched anywhere around Rs 500 crore, said an analyst.
What is more, there has been no capacity addition in the LVPs and syringes sector in the country since 1996 thereby increasing the value of the product immensely.
In the interim, ARCIL appointed the original CPL promoters as the custodians for supervising the day-to-day operations of the facility before it was actually handed over to the new promoters.
CPL has a capacity of 24 crore units for LVPs making it among the largest in the world while its syringe facility has a capacity of 48 crore units.
In addition, the small volume parentals capacity is 60 crore units. All these facilities are located within a unified complex spread over 600 acres of land.
Furthermore, with CPL going in for plant upgradation some years ago to conform to CGMP specifications (current good manufacturing practices), the export market for CPL products is huge as its products can enter the markets of developed countries also.
In view of all this, it is really shocking that CPL’s assets are going so cheaply, said an industry expert.
The filing of the application in the court which was scheduled for Tuesday but had to be postponed on account of some last minute discussions for a day or two would have to be followed up by crystallisaion of liability and approval of the shareholders before Nirma becomes the promoter of CPL’s LVP and syringe facilities. The process is expected to take around two months more.
Apart from these assets, CPL also has a pharma business which has been divested by ARCIL to the Delhi-based Abris while its 20 mega watt captive power station could fetch another Rs25 crore or so.


http://www.financialexpress.com/fe_full_story.php?content_id=106632
 
mr sushil handa has been the Chairman and Managing director of Core Health Care. While the public financial institutions has lost more than Rs 750 crores and has been referred as great bank robber , MR. Sushil handa continues to live lavishly. Thanks to blind and corrupt bureaucracy,income tax department , judiciary and top officers of financial institutions colluding with Handas

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