Comments
The uncertainty over drug maker Wockhardt’s sale of its nutrition business to Danone has ended.
The company has closed the Rs 1,280-crore transaction, Wockhardt said on Thursday.
Despite the deal with Danone being formalised last August, Wockhardt had some heart-stopping moments, as litigation involving its unhappy bond-holders cast its shadow on this deal as well.
An attempt in 2009 by Wockhardt to sell its nutrition business to Abbott fell through precisely for that reason — Wockhardt was “unable to resolve debt restructuring issues with some of its lenders”.
The Abbott deal was for Rs 600 crore. But Wockhardt sealed the Danone deal at Rs 1,600 crore.
Of this amount, about Rs 640 crore would go to Wockhardt Ltd, and an equal amount to Wockhardt EU, and Rs 320 crore to Carol Info Services, a source familiar with the deal said.
But worries over the Danone deal increased as the March 2012 timeline to seal the deal, mentioned by Wockhardt Executive Chairman Dr Habil Khorakiwala, also lapsed.
Debt restructuring
Debt-saddled Wockhardt had started exiting non-core businesses after it hit the hard times in 2008.
The company’s debt then was over Rs 3,800 crore.
The company defaulted on the repayment of its $110-million FCCB in October 2009.
All of which lead to it going in for debt restructuring. Industry watchers now say the company’s recent financials are robust and the company is getting out of the woods.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.