Elder Pharmaceuticals has reportedly filed for insolvency in an attempt to restructure its debts, which stood at Rs 1,000 crore at June-end in 2014. Trading of its shares has been suspended on the bourses.
According to the last intimation sent by the firm to the Bombay Stock Exchange (BSE), its losses stood at Rs 51 crore in the fourth quarter of 2015.
"With the company being unable to clear off its high debts, it has gone for the insolvency route. Now, it can come up with a restructuring plan," said an insolvency professional.
Calls and messages to the company's joint managing director, Alok Saxena, went unanswered.
Earlier, investors had sought intervention from the court regarding the non-payment of Rs 15-crore dues to around 23,000 small investors with fixed deposits in Elder Pharma. Comany owed another Rs 8 crore to statutory authorities.
In April last year, the company declared assets worth Rs 1,935.77 crore to the Mumbai High Court. In its response, Elder Pharma had, however, written off advances of Rs 1,031 crore that it owed to various parties.
The company is also in trouble in Dubai, where it is the guarantor for its international subsidiary. A bank has taken legal action to enforce payment of guarantee of nearly Rs 95 crore.
Experts remain baffled as to why Elder Pharma has not been able to set its books right. The company even sold 30 of its brands to Torrent Pharmaceuticals. Its real estate assets are worth at least Rs 600 crore.
Elder Pharma, for its part, has said the the litigation process has acted as a deterant in debt clearance.
The company began to disintegrate after a family feud broke out with the demise of its founder, Jagdish Saxena. Set up in 1988 with a manufacturing plant in Navi Mumbai, it had a major presence in women's health care, lifestyle diseases and pain management. More than 90 per cent of its revenue came from the domestic market. Shelcal, its calcium supplement, is a leading brand in the country.