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Wockhardt, DBS agree to out-of-court settlement

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Dispute over loan that the drug manufacturer had taken from the Singapore-based lender.

Debt-ridden pharmaceutical company and have agreed to an out-of-court settlement of a dispute over loans the drug manufacturer had taken from the Singapore-based lender.

According to sources, both parties have approached the with a consent decree.

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 consent decree, DBS Bank’s derivative exposure of Rs 91 crore in the drug maker has been settled at 75 per cent discount, sources said.

Further, the lender’s working capital exposure of Rs 44 crore has been settled at Rs 37 crore, sources added.

While a Wockhardt spokesperson could not be reached, a DBS spokesperson declined to comment on the issue, stating the matter is subjudice.

According to sources, the settlement deal is subject to approval from corporate debt restructuring (CDR) lenders.

Wockhardt, which has a debt of over Rs 3,700 crore, had undertaken a programme, which was approved by an empowered group on June 30, 2009, and 14 banks participated in it.

The company has sold some of its non-core business to pay off debt.

As part of the CDR process, the debt-ridden drug maker sold off its nutrition and animal healthcare business for about Rs 790 crore and completed the CDR much ahead of scheduled deadline of 2015.

Wockhardt also recently signed a Rs 909-crore deal with hospital chain Fortis Healthcare to sell its 10 hospitals.

The company’s promoters, the Khorakiwala family, recently sold its German subsidiary Esparma for Rs 120 crore.

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