Wockhardt may not be able to sell head office in Mumbai

Cash-starved pharma company Wockhardt may find it difficult to sell its headquarters in the tony Bandra Kurla Complex (BKC), as the promoters — the Khorakiwala family — own only 65 per cent of Wockhardt Towers.

The Khorakiwala family-owned private firm, Khorakiwala Holdings and Investments, had sold 35 per cent of the 150,000 square feet building, the first four floors, about eight years ago to various corporate houses. This was after the then main office of Wockhardt at Neelam Chambers in Worli collapsed and the corporate office was shifted to the new Bandra Kurla Complex building, which had become a famous landmark in that area, said sources.

 

According to sources, Wockhardt currently owns only the top six to nine floors of the building and the rest is occupied by companies such as Citibank, Western Union Bank and Franklin Templeton. Carol Info Services, a private BPO company held by the Khorakiwala family, also has a stake in the Towers. One of the owners of the building, other than the Khorakiwalas, will soon lease out a floor to the French Consulate.

Sources also said the Khoraiwalas have already pledged the nine-storeyed building between the National Stock Exchange and Securities and Exchange Board of India (Sebi) office at BKC with financial institutions as part of expansion plans for Wockhardt Hospitals, the family-owned healthcare chain.

“We never even discussed about selling our corporate office. Where will our employees go if we sell it?” said a senior executive of Wockhardt, who preferred not to be quoted, as he is not authorised to talk to media.

Wockhardt, which employs over 6,000 people worldwide, employs only 300 people at Wockhardt Towers, its only office in Mumbai. Senior management, the administration and marketing team for the Mumbai region occupy the corporate office.

Mounting debts due to aggressive expansion plans forced the company to approach the corporate debt restructuring (CDR) cell of ICICI Bank this week to restructure its Rs 3,700 crore debt in the books taken from various financial institutions and banks.

A source said initially the Khorakiwalas had sold part of the property to companies, which included the erstwhile Enron Corporation. When Enron exited India, the ownership changed hands. But this could not be verified with the management of Wockhardt or employees, as the transaction happened many years ago.

According to real estate sources, even Mumbai Metropolitan Region Development Authority (MMRDA) rules, which govern BKC, may prevent the owner of the building to sell their properties completely.

Fitch downgrades Wockhardt’s rating

Rating agency Fitch has downgraded the rating of drug firm Wockhardt, following the firm’s announcement of corporate debt restructuring.

Besides, another rating agency, Crisil, downgraded the rating of the short-term debt programme of the drug maker, following a default by Wockhardt in interest payment on a loan.