MUMBAI, July: The ailing public sector company Smith Stanistreet Pharmaceuticals Ltd (SSPL) has sought intervention of the union ministry of chemicals and fertilisers for getting Rs 50 lakh from the centre and guarantee for release of Rs 45 lakh as loan from banks for its immediate operations.

The company has, however, hopefully projected its production value target at Rs 11.41 crore, sales target at Rs 12.10 crore and gross collection at Rs 13.87 crore for 1997-98.

With this, the company expects to arrest the decline in its networth to -Rs 14.52 crore in 1997-98. The company's networth once declined to -Rs 32.02 crore in 1993-94 and -Rs 27.07 crore in 1996-97. It also proposes to reduce its outstanding dues to Rs 2.10 crore in 1997-98 from Rs 3.40 crore in 1996-97.

The company claimed that it has not received any finance from the government after being declared sick. A provision Rs 2 crore has been approved by Parliament for 1997-98, which is yet to be released. Bankers are also not releasing the working capital needs on technical grounds.

The company has estimated Rs 1.16 crore as Plan outlay and Rs 2.49 crore for non-Plan expenditure in 1997-98.

SSPL was referred to BIFR in 1992 and BIFR finalised its rehabilitation plan in August 1994 with April 1, 1994 as cut off date. But as the company could not conform to the revival plan targets, BIFR reviewed the company's performance on July 3, 1996 and directed SSPL to submit a revised revival plan to the operating agency, IRBI.

The final revival plan is in the process of preparation for submission to the government.

In the first three months of the current financial year, SSPL achieved a production value limit of Rs 1.25 crore as compared to Rs 1.22 crore in the corresponding period of the previous year. The sales limit in the first three months of the current financial year also increased to Rs 1.40 crore as against Rs 1.34 crore in the like period of the previous year.

The gross collection also increased to Rs 205 lakh in the first three months of 1997-98 as against Rs 128 lakh in the like period of 1996-97. However, the cash loss in the first three months of 1997-98 stood at Rs 111 lakh as against Rs 99 lakh in the first three months of 1996-97.

In 1996-97, the company improved its production limit to Rs 8.87 crore as against Rs 7.15 crore in 1995-96. It improved its sales limit to Rs 8.10 crore as against Rs 5.45 crore in 1995-96. Similarly, its gross collection limit improved to Rs 6.58 crore in 1996-97 from Rs 4.10 crore in 1995-96.

Its losses was halted at Rs 3.83 crore from Rs 4.09 crore in 1995-96, but the networth declined to -Rs 27.07 crore and outstanding dues increased to Rs 3.40 crore.

Due to mounting cash losses, considerable erosion of the company's working capital has taken place. Besides, the sales of the company are mainly institution-oriented which has made the cycle of realisation quite long and returns comparatively lower. The suppliers are also unwilling to extend any credit facility and the company is constrained to buy against cash payments.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.