Wockhardt settles with lender DBS Bank out of court
30 November 2009
Debt-ridden pharmaceutical company Wockhardt Ltd and its Singapore-based lender DBS Bank Ltd have agreed to an out-of-court settlement of a dispute over loans Wockhardt had taken from DBS.
Wockhardt will settle the loan at a 19 per cent discount, paying Rs37 crore to DBS, according to the terms of the consent decree signed on Saturday.
Last month, DBS had filed a winding-up petition against Wockhardt in the Bombay High Court, seeking liquidation of the company in order to pay off dues to its creditors.
Under the decree, DBS Bank's derivatives exposure of Rs91 crore in the drug maker has been settled at a 75 per cent discount; while the lender's working capital exposure of Rs44 crore has been settled at Rs37 crore.
The settlement is subject to approval from corporate debt restructuring (CDR) lenders. Wockhardt, which has a debt of over Rs3,700 crore, had undertaken a CDR programme on 30 June this year, and 14 banks participated in it.
The company has also sold some of its non-core business to pay off debt. As part of the CDR process, it sold off its nutrition and animal healthcare business for about Rs790 crore and completed the CDR much ahead of its deadline of 2015.
Wockhardt recently signed a Rs 909-crore deal with hospital chain Fortis Healthcare to sell its 10 hospitals. The company's promoters, the Khorakiwala family, also recently sold its German subsidiary Esparma for Rs120 crore.