×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Abbott wants to complete Wockhardt deal soon

Abbott wants to complete Wockhardt deal soon
Comment E-mail Print Share
First Published: Sun, Jan 17 2010. 09 44 PM IST
Updated: Sun, Jan 17 2010. 09 44 PM IST
Mumbai: US-based drug maker Abbott Laboratories Inc., which in July agreed to purchase the nutrition business of embattled Wockhardt Ltd for Rs620 crore, has affirmed its commitment to completing the transaction at the earliest.
“We remain committed to completing the acquisition, and are working to complete it as quickly as possible,” Steven B. Collens, director and head of public affairs at Abbott Nutrition International, the nutrition business arm of Abbott, said in an email reply on Friday to queries from Mint.
Abbott’s affirmation comes on the heels of a petition filed in the Bombay high court by a group of investors holding 40% of Wockhardt’s foreign currency convertible bonds (FCCB) to block the Indian drug maker’s asset divestment plan.
The Abbott executive, however, did not respond to specific queries on whether the company is facing a delay in closing the deal because of legal issues, and whether it will reconsider the acquisition if the completion of the deal is delayed indefinitely.
Abbott’s intention to close the deal as early as possible puts Wockhardt in a potentially tricky situation. On 15 January, the firm assured the Bombay high court, which is hearing a winding up petition filed by foreign investors, including Calyon Crédit Agricole CIB, Barclays Bank Plc and QVT Financial LP, that it will not sell assets including the nutrition business without informing the court as well as the petitioners at least 48 hours in advance.
A prior notice ensures that bondholders get the opportunity to raise any objection to Wockhardt’s asset-sale plan.
Justice S.J. Kathawalla, who is hearing the case, on Friday adjourned it to 29 January.
“We stick to our earlier stand to block any asset sale by the company before resolving the pending matters related to the FCCB,” a spokesman for the bondholders’ group said on Saturday.
The bondholders moved court in November seeking the liquidation of Wockhardt after the company failed to redeem the bonds in October. The zero-coupon bonds, which offered a 6% yield on maturity, were issued in 2004, and were due for redemption or conversion into equity by October 2009. The bonds’ conversion to equity became irrelevant after Wockhardt’s shares fell below the promised Rs486 each to Rs182 in October.
Faced with a series of financial setbacks, including Rs581 crore in mark-to-market and foreign exchange derivatives losses, Wockhardt had sought corporate debt restructuring (CDR) by its lenders.
Following the CDR approval by key lenders, it proposed two options to bondholders, asking them to either redeem the bonds at a 65% discount or to convert them into equity by 2015.
While both these options were not acceptable to the bondholders, Wockhardt also rejected an alternative option put forward by the investors to exchange the bonds at a conversion price of Rs210 apiece after five years.
ch.unni@livemint.com
Comment E-mail Print Share
First Published: Sun, Jan 17 2010. 09 44 PM IST