The Hindu Business Line : CDR package: Wockhardt to address creditors’ concerns by month end

Mumbai, Nov. 7 Drug-maker Wockhardt has till the end of the month to address concerns raised by creditors opposed to what they call a “one-sided” debt restructuring exercise.

Raising questions over the corporate debt restructuring (CDR) exercise that Wockhardt is undertaking, foreign banks such as Singapore-based DBS, and Foreign Currency Convertible Bond (FCCB) holders such as BNY Corporate Trustee Services Ltd told the Bombay High Court on Saturday that they were not taken on board for the CDR package.

DBS had filed a winding-up petition against Wockhardt at the Bombay High Court, and more recently BNY Corporate Trustee sent the company a notice. Counsel for Wockhardt, however, refuted that the CDR process was unilateral.

While the Court gave no interim order, Wockhardt was told to inform the Court if it affected a sale of assets in the period before the next hearing on November 27.

At the hearing, DBS counsel said that the Reserve Bank of India guidelines required 75 per cent of the lenders to approve the CDR scheme and that this which was not the case with Wockhardt’s CDR package.

Counsels for the foreign lenders and investors also objected to the option placed before them where Wockhardt offered to buy back the FCCB at a discount to the conversion price.

Those who did not take the buyback option were offered an exchange of their bonds for preference shares, convertible partly in 2015 and in 2018.

Foreign investors and creditors also expressed concern over Wockhardt’s sale of assets. Wockhardt has in the past stated that it would exit non-core businesses and has since sold several businesses, including its Animal Health and Nutrition business.

The sale of Wockhardt’s nutrition business to Abbott though seems to have run into rough weather with the foreign lenders.

Debt

Wockhardt is saddled with debts of Rs 3,700 crore, counsel for DBS told the Court. The liability to DBS is about Rs 130 crore, he added.

Wockhardt had approached the CDR Cell through ICICI Bank and in July, Wockhardt’s CDR package was approved by the CDR Empowered Group.

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