Lehman Brothers Special Financing (LBSF) has withdrawn its winding up petition against Mumbai-based Wockhardt. Following the withdrawal, the hurdle for selling Wockhardt's nutrition business to Danone has been cleared.
The case was withdrawn after Wockhardt's European subsidiary, Wockhardt EU, reached an out-of-court settlment with Lehman in a case related to derivative loss of $24 million. Lehman had filed a winding-up petition against Wockhardt, at the Bombay High Court (HC) in March 2011.
Under the parent company guarantee, Mumbai-based Wockhardt acted as a guarantor in the deal between Wockhardt EU and Lehman in 2008. When Wockhardt EU defaulted the payment, Lehman filed a petition again, against the gurantor at the Bombay HC in 2011.
French nutrition major, Danone, has already entered into an agreement with Wockhardt for buying out the nutrition business for about Rs 1,576 crore. Earlier, Wockhardt's talks with Abbott failed due to its legal battle with foreign currency convertible bond (FCCB) holders.
Last year, the Bombay HC had directed debt-ridden Wockhardt to clear payments to FCCB holders by August 31, 2012.
The company had defaulted on the re-payment of its $110-million FCCBs in 2009. Although the company had reached a settlement with a few bondholders, about $60 million is to be paid to the remaining holders.
The bond holders who have been slapped with a defamation suit include, BNY Corporate Trustees Services Ltd, Barclays Capital Services Ltd, QVT Fund LP, Quintessence Fund LP, Bank of Nova Scotia and Sun Pharma Global Inc.