Kolkata, May 21 (IANS): Bengal Chemicals and Pharmaceuticals Ltd. hopes to clear its existing debts through improvement of cash generation and sale of surplus land by end of the 2017-18 Fiscal Year, a top company official said on Sunday.

The state-run pharmaceuticals company has an outstanding debt of Rs 200 crore from the Centre and Rs 13 crore debt from the public sector lender United Bank of India (UBI). It expects to obtain Rs 300 crore from the land sale.

"The objective of the land sale is to reduce the liability. We have got approval from the Centre to sell surplus land of 25.07 acres at our Panihati manufacturing plant. A tender... has already been floated," Managing Director and Director (Finance) P.M. Chandraiah said.

"According to the present circle rate, we expect to realise around Rs 300 crore from land sale in the current fiscal and hope to repay the Rs 200 crore debt taken from the Centre," he said.

Due to the improvement in the financial position and net cash generation in 2016-17, the company managed to repay half of its bank loan to the UBI in March.

"Out of the total bank loan of Rs 26 crore, 50 per cent loan has been repaid. We are planning to fully repay the balance amount of Rs 13 crore by December 31, 2017, from the cash generation of the company," Chandraiah said.

Founded by Acharya Prafulla Chandra Ray, the Father of Indian Chemistry, the company had reported a net profit of Rs 4.51 crore in 2016-17 for the first time in six decades.

The company is looking to log a net profit Rs 10 crore in the current financial year.