The proposal, part of a package being considered for reviving the ailing Sol Pharma, has, however, yet to be cleared by the consortium of banks led by Allahabad bank and financial institutions. Institutions had earlier restrained the company from paying dividend for 1995-96.

"The joint-venture proposal is under consideration and the company has yet to tie-up certain funds in this regard. We have also urged them to dispose off certain brands," bankers in the consortium said. The eight-member bankers' consortium include Canara Bank, Indian Bank, State Bank of Hyderabad, State Bank of Mysore, State Bank of Travancore and the UTI Bank. Top management officials were, however, unavailable for comment.

Theproposed hive off is expected to result in an inflow of $7.5 million, according to Sol Pharma's latest annual report. The joint venture will make products exclusively for the Israeli company.

Sol Pharma also plans to recommence operations at its formulations facility in Nacharam ,essentially to undertake job work manufacturing for multinationals. The Hyderabad-based company is, however, quick to add that "a running unit will fetch a better bargain in case a decision to hive off this unit is taken at a later stage".

It also says that "the prospects available for the formulations business are being reassessed to examine the possibility of infusing funds by inducting outside promoters to ultimately improve upon the brand value of this business".

Earlier, Maharashtra's leading financial development institution, Sicom, had put on sale its entire block of 1.1 million equity shares in Sol. These shares were received as collateral for a Rs 5-crore loan extended to Sol Pharma. Sicom's 1.1 million equity sharestranslate into a holding of over 8 per cent of Sol Pharma's Rs 12.7-crore equity base.

The company registered sales of Rs 14.36 crore for the six months ended March 31, 1998, while losses were Rs 99.50 crore during the period. Outstanding working-capital loans, including term loans from banks, as on March 31, 1998 were Rs 137.26 crore.

Meanwhile, Sol Pharma had also mobilised around Rs 32 crore under its Alday Cash Bonds Scheme during 1996, now due for repayment. These funds were apparently raised from local doctors to regularise the company's bank accounts, though details could not be ascertained. The company plans to undertake steps to repay the deposits in a phased manner.