Hindustan Antibiotics Ltd, a Pune-based maker of penicillin and other pharma products, is pinning its hopes on a ₹250-crore Voluntary Retirement Scheme (VRS) for a quick turnaround. Under the scheme, nearly 600 employees will get the golden handshake.

The PSU, which has been struggling to stay afloat for over a decade, is also close to sealing a deal for the sale of surplus land of about 87.70 acres in Pimpri, which will take care of part of its liabilities, said Nirja Saraf, Managing Director. The company has excess land of 264 acres.

“The VRS package got delayed due to the Model Code of Conduct in place for the general elections. We expect that it will come through in July,” she said on the sidelines of signing an MoU with Midhani here.

Of the company’s total strength of 900, around 600 are expected to take the VRS.

Hindustan Antibiotics, the country’s first pharma PSU, ended FY19 with a turnover of ₹67 crore. It has set a target of ₹160 crore for the present fiscal. It needs to offset net liabilities of up to ₹821.17 crore left after waivers and deferments through different measures.

In 2018, the Centre had approved a waiver of loans and interest amounting to ₹307 crore and deferment of various dues amounting to ₹128 crore as part of the relief efforts. Once all these measures are implemented, the company expects to start afresh.

Divestment plan

The Centre, in 2016, had decided to divest/close four public sector drug companies — Hindustan Antibiotics, Bengal Chemicals and Pharmaceuticals Ltd, Indian Drugs and Pharmaceuticals Ltd and Rajasthan Drugs and Pharmaceuticals Ltd. Potential buyers would be identified for the strategic sale of the first two, while the last two would be shut down.

Asked about the company’s growth strategy for the near future, Saraf said it will begin the manufacture of small bulk drugs with a turnover target of ₹100 crore in two years.

It will also manufacture local substitutes for pharma products and indigenous bio-implants in collaboration with Midhani. A target of ₹5 crore turnover has been set for year one and it will grow in multiples year on year, she added.

Referring to the alleged suicide of one of the employees in Pune recently, she said: “It has nothing to do with the company, but (due to) personal issues”.

On the prospects of finding a strategic buyer from the private sector, she said not much progress has been made.

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