Mumbai: India’s sixth largest drug firm by sales, Wockhardt Ltd, on Tuesday said Habil Khorakiwala, its main promoter and long-serving chairman and managing director, would no longer be managing director and be replaced by younger son Murtaza Khorakiwala. The senior Khorakiwala will continue as chairman.
In a parallel development, the company has postponed its fourth quarter results to April-end, citing non-completion of the statutory audit.
The results were to be announced on Tuesday but will now be released on 25 April. This is the second such delay. Earlier, the company had in January postponed announcement of the results.
The drug manufacturer has also referred itself to the corporate debt restructuring, or CDR, cell of ICICI Bank Ltd. A company usually approaches the CDR cell of its banker to restructure its debt when it is under financial pressure.
Such restructuring is done by either converting the interest burden into a fresh loan, giving another loan, lengthening the payment schedule or even reducing interest rates on an existing loan.
The firm had also planned to hold a press conference on Tuesday but “postponed” it at the last moment. Instead, it issued a release to stock exchanges announcing the further delay in publishing its fourth quarter earnings. Wockhardt?follows?the?calendar year.
Its release to the stock exchange also said the promoter’s two sons Murtaza and Huzaifa have been appointed as additional directors.
Murtaza Khorakiwala will take charge as managing director after the company’s shareholders approve the appointment.
Wockhardt’s shares rose 7.14% on Tuesday, to close at Rs85.50 on the Bombay Stock Exchange. The changes at the top come at a time when the firm is trying to restructure its businesses even as its debt burden is mounting.
“The change in the top management at Wockhardt could be linked to the terms and conditions of the CDR cell,” says an analyst with a foreign brokerage who asked not to be named.
Wockhardt’s promoters have pledged a majority of their shares in the company, along with the building at Mumbai’s Bandra-Kurla complex, the firm’s headquarters, to raise money from banks to fund Wockhardt Hospitals Ltd. The Khorakiwala family holds around 71% in the hospitals company.
Wockhardt has to repay $140 million (Rs714 crore) of foreign currency convertible bonds by September.
Huzaifa Khorakiwala, an additional director of Wockhardt and elder son of Habil Khorakiwala, said: “It’s a natural progression in the lifetime of a dynamic organization to continuously further the interests of all its stakeholders.”
Wockhardt had been trying to raise funds to repay some of its debt, including cash loans from banks.