Troubled pharma major Wockhardt Ltd has called off $130 million deal to sell its nutritional business to Abbott Laboratories Ltd. Wockhardt informed the stock exchanges today that it has reached an agreement with Abbott to terminate the sale agreement which covered brands like Farex and Protinex.
But Wockhardt did not disclose reasons for the calling off the deal. The transaction was signed in July last year. Recent media reports said the foreign lenders of Wockhardt were oppossing disposal of assets citing that the company’s corporate debt restructuring (CDR) favoured the domestic lenders.
Wockhardt is in the midst of corporate debt restructuring and is selling its non-core units as it seeks to raise funds to settle some of its debt. According to a Business Standard report, the company has debt to the tune of Rs 3,700 crore. Wockhardt has sold its 10 hospitals to Fortis Hospitals Ltd for Rs 909 crore last year.
The company also sold its animal health division to French major Vetoquinol as part of the de-leveraging exercise. More recently, The Economic Times reported that trouble was brewing with foreign debtors after Wockhardt defaulted on repayment of $250 million loan raised in its European operatuosn based in Switzerland.
The parent Wockhardt India is the guarantor for the borrowings by Wockhardt EU Operations (Swiss) AG, and the banks have pari-pasu charge on some of Wockhardt India’s assets here, the report claimed.
The Khorakiwala family-led Wockhardt has a global footprint and has operations in the US, UK, Ireland and France. It has 14 manufacturing plants, and has subsidiaries in overseas geographies as well. It claims a market capitalization of around $1 billion, with over 70% of its revenue coming from the international markets.