• JANUARY 13, 2000

Core Healthcare to settle dues via sale of assets

Core Healthcare is set to finance the settlement of its dues with 20 creditors through a sale of large chunks of its assets. The Rs 3.2 billion company owes its creditors almost Rs 10 billion.

The fact however remains that the company is left with no option but to sell parts of mainstream business which includes its new IV fluids, syringes and indictable units. Ironically, these are the very assets, which increased the company’s debt burden substantially.

The moot point is that the company will be severely hampered while competing with units such as Wockhardt which have started to aggressively market their IV fluid range. And the fact remains that once a hospital uses a particular brand of IV fluid it does not change its supplier since the hospital staff gets used to a particular type of supporting equipment.

So while reduction of the debt burden will pare the interest burden, the topline growth itself will be adversely affected one because of the lack of facilities which will be sold off and two because of the loss of market share which the company will find extremely difficult to recover.

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