Wockhardt to conclude nutrition biz sale by 2012

Wockhardt to conclude nutrition biz sale by 2012

Mumbai: Debt-laden Indian drugmaker Wockhardt Ltd expects to conclude divestment of its nutrition business to French company Danone by March 2012 as it is in talks with its creditors to resolve long-pending issues related to bond repayment.

In 2009, Wockhardt had to withdraw plans to sell the nutrition business to Abbott Laboratories as some of its creditors opposed the deal on valuation.

Wockhardt, which has secured debt of about 3200 crore, is fighting a court case with trustees of four bond holders who have foreign currency convertible bonds (FCCBs) worth $74 million that are to be repaid at a 29% premium, Chairman Habil Khorakiwala said.

Drug major Sun Pharmaceuticals Industries holds about 30% of the FCCBs.

Earlier this month, Danone agreed to buy Wockhardt’s nutrition business for about $355 million and enter the baby nutrition and medical nutrition markets in India.

“I’m sure the existing lenders will work with us to find a solution to the problem," Khorakiwala said, adding the company’s debt-to-equity ratio was 2.8 times.

Founders of Wockhardt have filed a defamation suit against trustees of the bond holders in a Gujarat court for 939 crore, he added.

“The bond holders and trustees have made lot of allegations. Our reputation of 40 years has been hampered," he said.

Earlier in the day, the company said it swung to profit worth 190 crore in the quarter ended June.

On Tuesday, shares of Wockhardt, valued at $1.1 billion, ended down 5.9% at 421.2 in a weak Mumbai market.