Wanbury settles Doctors Organic dues at discount

Bulk drugs manufacturer Wanbury Ltd has entered into a one-time settlement of loans taken by Doctors Organic Chemicals Ltd (DOCL).

This follows Wanbury's acquisition of 51 per cent stake in DOCL, which has been referred to the Board for Industrial and Financial Restructuring (BIFR).

Wanbury paid Rs 6.48 crore to Industrial Development Bank of India (IDBI) to settle a loan of Rs 19.20 crore. This is at 66 per cent discount to the principal amount. It settled Industrial Finance Corporation of India's (IFCI) Rs 4.81 crore for Rs 3.22 crore, a discount of 33 per cent.

Wanbury said the process of settlement of debt with the two financial institutions was completed last week. Wanbury shares closed 2.15 per cent down at Rs 109 on the Bombay Stock Exchange today.

Ashok Shinkar, director - corporate finance at Wanbury, said the settlement of loans lays the foundation to carry forward the merger process through BIFR and to consolidate DOCL with Wanbury.

Wanbury exports bulk drugs to regulated markets such as the US and has a USFDA-approved plant at Patalganga in Maharashtra. The acquisition will bring another USFDA-approved facility under Wanbury's fold.

DOCL has a multi-product facility in Andhra Pradesh spread over 18 acres of land. It has the potential to provide contract manufacturing services to global pharma majors and other existing clients of Wanbury.

Shinkar said Wanbury is also in the process of acquiring Pharmaceutical Products of India Ltd (PPIL). It is currently engaged in negotiations with about 18 banks to which PPIL owes Rs 60 crore of principal amount. These loans are very old and the amount due to banks has increased substantially due to adding up of interest.