Drug-maker Wockhardt is set to exit the process of restructuring its debt, three years after it had first sought the lifeline.
The company’s board has taken a decision to exit the corporate debt restructuring (CDR) process, Wockhardt Chairman Habil Khorakiwala said on Monday.
The company has written a letter to the CDR committee to work out the exit process, he said, without outlining a timeline.
Wockhardt’s debt last year was Rs 3,400 crore and Rs 1,300 crore was under CDR, Khorakiwala said. This is the first time the Wockhardt management was confirming that it was indeed poised to get out of the woods, putting a lid on months of market talk on the issue.
Wockhardt was saddled with over Rs 3,800-crore debt, when it approached the debt restructuring cell through ICICI Bank, in March 2009.
In October 2009, Wockhardt defaulted on repaying its $110-million FCCB (foreign currency convertible bonds), making an already bad situation worse.
Settlements
As part of the CDR, all loans have been restructured, Khorakiwala said. The company would make a payment and settle with banks that do not want to continue with the CDR process, he added. Wockhardt had been drawn through much litigation by unhappy bond-holders after it defaulted on the FCCB. But as committed to the courts, it is ready to pay the remaining Rs 200 crore to FCCB holders, he said.
Late last month, Wockhardt closed the Rs 1,600-crore deal to sell its nutrition business to Danone.
The funds would go towards repayment of debt, Khorakiwala said. Wockhardt had exited non-core businesses as part of regaining its financial health.