Cough up dues or face liquidation, HC tells Wockhardt
08 September 2011
The Bombay High Court on Wednesday asked drug maker Wockhardt to work out a plan and a timeframe for paying Rs350 crore dues owed to its bondholders, failing which the liquidator could take charge of the company.
A bench headed by Justice D K Deshmukh criticised Wockhardt on its debt and directed the pharma company to de-link this repayment from its asset sale to Danone.
The court said it was "not concerned if the company has to sell its assets to pay a bondholder" but added that it would mean that the pharmaceutical company was not in a position to pay its debts.
A group of bondholders led by bond trustee Bank of New York Mellon, Sun Pharma Global and hedge fund QVT, and other creditors had filed a winding-up petition in court against Wockhardt after the company defaulted on the repayment of its $110-million foreign currency convertible bonds (FCCB) in 2009.
During the course of these proceedings, Wockhardt had been restrained from selling assets without informing the court.
In retaliation, the promoters of Wockhardt, the Khorakiwala family, had in June filed a defamation case against bond holders in Ahmedabad, seeking Rs939 crore in damages.