Wockhardt May Issue Pref Shares To Bankers: Report
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Wockhardt May Issue Pref Shares To Bankers: Report

By Reuters

  • 24 Jun 2009

Drugmaker Wockhardt Ltd, which has sought a debt restructuring, may issue preference shares to banks against some of their derivative losses, the Economic Times daily reported on Wednesday.

Mumbai-based Wockhardt may also get nearly a decade to repay its local borrowings as part of the restructuring exercise, the report said without citing any source.

Company officials declined to comment.

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The terms of the restructuring plan are expected to be finalised by June-end if the promoters agree to certain conditions, the daily said quoting a senior banker.

For expired contracts, where losses have been crystallised and the company owes money to banks, preference shares with a nominal interest and maturing in 2017 will be issued to the lenders and these will be converted at a premium on redemption, it added.

For Wockhardt's domestic loans of 20 billion rupees, the banks have offered to restructure the terms with 8 percent interest and a 10-year repayment schedule, the report said.

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However, more than 60 percent of Wockhardt's $300 million derivative losses is with banks that are not part of the corporate debt restructuring and the company will have to deal with these separately, it added.

Wockhardt's other liabilities include $110 million in foreign currency convertible bonds, coming up for redemption in October, and external commercial borrowings of $250 million, the Economic Times said.

The company, which has suffered huge derivative losses due to currency fluctuations, in March decided to seek corporate debt restructuring. 

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