TEAM HERALD
teamherald@herald-goa.com
PANJIM: The State will disinvest 74% of its stake in Goa Antibiotics & Pharmaceuticals Ltd, the cabinet decided Wednesday. However, chief minister Manohar Parrikar who briefed the press on this issue was at pains to explain that the sale was not to any private party but to a union government entity and no workers would be retrenched.
The deal is with HLL Lifecare Ltd (HLL) a Mini-ratna, a Central Public Sector Enterprise. In-principle approval of the Government was conveyed in May 2013 to carry out due diligence. On completion of their due-diligence study HLL submitted their offer to EDC.
HLL has also consented to takeover contingent liability of about Rs 390 lakh which is not considered in the above and in addition, to make additional investment of about Rs 226 crores in next five years. GAPL has 205 workers.
“The government has approved 74% disinvestment. EDC will decide on the modalities,” the chief minister said adding that they would also be settling an issue of some 15,000 sq mts encroachment. This would be sorted out amicably he said, adding that it was not part of the agreement.
GAPL is a wholly owned Subsidiary Company of EDC Ltd, set up through joint participation with central PSU Hindustan Antibiotics Limited (HAL), Pune and in operation since 1983 at Tuem Industrial Estate, Pernem. However, in 1987 HAL decided to transfer its shares to EDC and exited.
According to the government note, GAPL’s main weakness over the years has been lack of expertise in R&D, Management and Marketing and its performance has been far below expectations resulting in huge accumulated losses of about Rs 2046 lakh as on March 31, 2013. The payment to be received from HLL for acquisition of 74% Equity in GAPL is Rs 700 crore. Repayment of balance term loan by GAPL to EDC (outstanding as on 31/03/2013) is Rs 1167 crore and Balance value of 26% Equity holding by EDC is Rs 246 crore adding to total outstanding of Rs 2113 crore. There are no additional financial commitment required from the state government and on approval and implementation of the proposal there could be revenue earnings to the government, as a result of increase in economic activities, says the note prepared by the finance department.
