Wockhardt, DBS Bank agree on out-of-court settlement

Written by Press Trust of India | New Delhi | Updated: Nov 30 2009, 05:51am hrs
Debt-ridden pharmaceutical firm Wockhardt and DBS Bank have agreed to an out-of-court settlement of a dispute over loan that the drug manufacturer had taken from the Singapore-based lender.

According to the sources familiar with the development, both the parties have approached the Bombay High Court 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 Banks derivative exposure of Rs 91 crore in the drug maker has been settled at 75% discount, sources said.

Further, the lenders working capital exposure of Rs 44 crore has been settled at Rs 37 crore, sources added. While, Wockhardt spokesperson could not be reached, DBS spokesperson declined to comment on the issue stating that 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 CDR programme, which was approved by an empowered group on June 30, 2009, and 14 banks have participated in it.

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

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