New Delhi: Debt-ridden pharmaceutical firm Wockhardt is hopeful that the passage of the corporate debt restructuring (CDR) will take place by the end of this month, a move that would end its financial woes.
According to a person familiar with the development, the plan to restructure company’s finances with the banks is in the final stages and is expected to complete by June end.
It is a very complex process. It is for the first time that a company with comparatively healthy operating profit is going through this process, sources said, adding that there are still some issues the banks have raised with the company and this may delay debt restructuring by a few weeks.
When contacted company spokesperson declined to comment on the issue.
The company has reported a 35% growth in its sales in the financial year ended on 31 December 2008 at Rs3,593 crores and also registered an operating profit of Rs808 crores.
However at the same time it has reported a mark to market losses of Rs581 crore in the last fiscal which coupled with a debt of Rs3,700 crore has made the situation difficult for the company.
It is very difficult for the bankers to control the mark to market losses as Wockhardt has a high exposure to foreign exchanges. Exports accounts for around 80% of the company’s overall sales.
Wockhardt, had in March, applied to its bankers for restructuring of debt.
“Banks are looking at various options for restructuring the debt and issuing of preferential shares could be one of the options,” sources said.