While PPIL itself is not in good financial health, sources say that the company has the first right of refusal if and when Sandoz wants to offload its holding in Wander. However, Novartis India's official spokesperson could not be contacted for her comments on the issue. The vehicle of acquisition by the Novartis group is, however, unclear.

The Sandoz holding in Wander was originally held through the erstwhile Sandoz India (roughly 15 per cent), while Wander Berne, a 100 per cent subsidiary of Sandoz Basle, accounted for another 40 per cent of the equity capital. PPIL had, at that time bought-out the 22.5 holding of Khatau Vallabhdas, in Wander. Currently,PPIL and an investment company together hold 78 per cent of Wander's equity, while Sandoz now holds the remaining 22 per cent. Meanwhile, Pharmaceutical Products of India Ltd's (PPIL) losses are understood to have touched Rs 48 crore, eroding its networth completely.

The company is now a BIFR case and IDBI is expected to chalk out a rehabilitation programme for the company within the next four weeks. However, it is learnt that PPIL's financial fortunes will not affect its alliance with American multinational, Wyckoff Chemical Company for bulk intermediates. The 50:50 PPIL-Wyckoff joint venture for bulk intermediates was formed in 1996, and the American partner was responsible for distributing these products in the US. The alliance has since been renewed for a further period of around eight years.

Sources said that PPIL's losses were mainly due to a delay in the implementation of the Patalganga project for bulk intermediates following a change in its scope, significant product outsourcing and arecommendation by the company's auditors to treat capex on research as a revenue expenditure.

Significantly, Wander's key nutritional supplement brand, Spert, licensed to PPIL for three years, may now be transferred back to the Novartis group effective November this year, though both partners can exercise a renewal option.