MUMBAI, Nov 16: Core Healthcare has mandated Standard Chartered Bank for a Rs 100 crore private placement of equity. Fresh equity infusion is being sought by the Ahmedabad-based pharamaceutical company in line with the stipulations laid down by ICICI in its restructuring report for further loan support by its creditors.

According to sources close to Core, the management has already had detailed discussions with Standard Chartered Bank on the private placement. "At this point in time, we are confident of raising anything between Rs 50 crore and Rs 75 crore", said one of the company's bankers.Sources say that Core Healthcare has made submissions to the above effect in its capacity as respondent to the winding-up petition by American Express Bank in the Gujarat high court.

The petition had been dismissed by the court.In the meanwhile, Core Healthcare has started negotiations with a few parties for the sale of its 100 mw power venture. This is in tune with ICICI's restructuring report, which has asked the company to divest its formulations and power business by December 31 this year.The company is currently in the process of setting up a power project to generate 19 mw of power and 46 tph of steam. As of now, the company gets 66 kv supply from the Gujarat electricity board (GEB).

Core Healthcare owes nearly Rs 850 crore to its creditors. Out of this, only Rs 53 crore is unsecured. The company is reeling under a liquidity crunch. ICICI and other creditors to the company have agreed to extend loan support to the company by rescheduling their exposures provided it brings in Rs 100 crore through a private placement of equity by December 31, 1998.

The company has to adhere to the deadline laid down by the financial institution. ICICI has made it clear that the restructuring of debt will be considered null and void if the promoters fail to bring in their obligation of Rs 100 crore in equity by December 31, 1998. If the promoters do not keep their part of the bargain, a fresh restructuring package to the satisfaction of ICICI is to be drawn up. It might also initiate moves to secure a change of management by inducting a new promoter.Among other things, Core Healthcare and the promoters have been asked to provide an unconditional power of attorney empowering ICICI to take up any restructuring exercise in the event of an inability to infuse Rs 100 crore in equity by the stipulated date.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.