The government is set to raise over Rs 1,000 crore next week by selling close to 88 acres of prized land of Hindustan Antibiotics Ltd (HAL) at its Pimpri plant in Maharashtra near the Mumbai-Pune highway.

The sale, aimed at raising money to pay off the dues of country's first state-owned pharma company, might not cross the reserve price of Rs 1,048 crore as private bidders have not been allowed and only state or central government-owned have been allowed to participate in the auction of 17 land parcels of varying sizes, sources said.

"There hasn't been lot many bidders showing interest; and this is after the extension of the deadline and the auction date being stretched to July 11. As per CCEA (Cabinet Committee on Economic Affairs) directive, private bidders have been barred and institutions like City and Industrial Development Corporation of Maharashtra (Cidco) or Maharashtra Housing and Area Development Authority (Mhada) are the ones who would be among the major winners," sources in the know of the development told DNA Money.

Prospective bidders have been called for a meeting today where presentations on the land parcels would be made.

The Cabinet in December had approved sale of 87.70 acres of land of Hindustan Antibiotics at Pimpri in Maharashtra and mandated "that only that much surplus land of HAL as would be required to meet the liabilities (Rs 821.17 crore) be sold through open competitive biddings to government agencies and the outstanding liabilities be cleared from the sale proceeds," a government document says.

The banks to whom Hindustan Antibiotics owes money are making a parallel attempt to raise some funds by selling off the land to which they have rights.

Punjab National Bank, which represents the banks' consortium, is in the process of auctioning some land at a reserve price of Rs 128 crore against their combined loan amount of Rs 176.30 crore.

The sale process of the government may not be smooth sailing as the local municipal body, the Pimpri Chinchwad Municipal Corp, has raised some objections to the sale, sources said.

The 1,050-odd employees of the Pune-based PSU have got their salary dues cleared till March and are awaiting the fund-raising from the current auction to clear their remaining dues and prepare the company for a strategic partner.

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