The Department of Investment and Public Asset Management (DIPAM) has said the Thiruvananthapuram-based HLL Lifecare will be sold as a whole and not in parts. Also, the acquirer may get an opportunity to exit from part of the business.
The Government aims to sell its entire stake in HLL Lifecare, which produces the ‘Moods’ brand of condoms and other contraceptives.
“On completion of the transaction as well as the stipulated lock-in period, flexibility would be given to the strategic acquirer for an easy exit from a part of business which is not in sync with the business plans of the acquirer. The condition of lock-in period of the entire shareholding in the company, requirements regarding lock-in of equity, continuity of business, staff service conditions, etc. will be clarified at the second stage of the bid process,” DIPAM said in response to queries raised by potential bidders.
EoIs to be submitted by Jan 31
The disinvestment process will be implemented through open competitive bidding. Expressions of Interest (EoIs) can be submitted by January 31. The company was incorporated on March 1, 1966 as Hindustan Latex Limited under the Health Ministry. It was renamed HLL Lifecare Limited in 2009. It started as a manufacturer of natural rubber latex condoms. Later, it diversified into a healthcare major with emphasis on healthcare services – the affordable pharmacy network across the nation, healthcare services outlets, vaccine security of the nation, medical devices park, etc.
The company states it has emerged as a global corporate of international acclaim, taking under its wings seven subsidiaries with 21 offices and 7 manufacturing units spread across locations and having a multitude of products ranging from contraceptives and hospital products to pharmaceuticals; and services from diagnostics to infrastructure development.
As on date, HLL has been accorded ‘captive’ status by the Health Ministry with respect to procurement of condoms and contraceptives. According to the Memorandum of Understanding (MoU) between the Ministry and the company, 75 per cent of the company’s manufacturing capacity for condoms and 55 per cent of the manufacturing capacity for oral contraceptives is reserved for fulfilment of government tenders. Question is what will happen after privatisation?
In response to this, DIPAM said the existing contracts will not be impacted by the proposed transaction, which will continue for the remaining period of the contracts. “Going forward, the company may have to go through the regular tender process in competition with other companies,” it said.
Chengalpattu land not part of disinvestment
A Preliminary Information Memorandum (PIM) related with the company’s disinvestment clarified that 430.10 acres of land situated at Chengalpattu in Tamil Nadu, in the possession of HLL on lease basis, will not form part of the strategic disinvestment. This land was given for setting up an Integrated Vaccine Complex (IVC) to make vaccines for the Centre’s Universal Immunization Program (UIP) and new generation vaccines and for a ‘Medipark’, which is an industrial park for medical devices.
Later, this land was given on sub-lease basis to two subsidiaries, HBL and HML. In March this year, these two companies were demerged from HLL and they ceased to be subsidiary companies, so land given on lease is not part of the disinvestment.