The ability of the company, manufacturing Penecilin-G (Pen-G), for timely payment of interest and principal is likely to be affected by adverse business circumstances, ICRA said in its current report.

Domestic manufacturers of Pen-G were badly hit by excess supply resulting in lower price realisations. Even though Pen-G was on negative list of imports, firms were allowed to import bulk drug under advance licence solely for making antibiotics for exports.

Low price realisations in domestic and international markets have resulted in TGBL booking loss of Rs 51 crore in 1997-98. Though downstream antibiotics give better realisation due to value addition, excess supply in market has kept realisation on antibiotics under check. Due to accumulatedlosses TGBL's net worth reduced from Rs 73 crore in 1997 to Rs 16 crore as on March 1998, it said.

TGBL has requested the financial institutions for a reschedulement of the debt obligations. TGBL, in the meanwhile, is working on the ways to curtail its operational costs and also improve its realisation by increasing thrust on downstream antibiotics. ICRA has downgraded the rating assigned to the PCD programme of Bakelite Hylam Ltd (BHL) to `LBB' indicating inadequate safety. BHL is a leading domestic player in industrial and decorative laminates.