THE Bombay High Court has admitted an application filed by Singapore-based DBS against debt-ridden drugmaker Wockhardt’s plans to divest some of its assets.
In the course of its presentation, DBS, a creditor of Wockhardt has also sought the court to restrain Wockhardt from creating any third-party interests in its assets and maintain status quo on transactions not consummated.
Both parties came to an understanding in the court that status quo would be maintained on non-compete fees, which was still not paid, until the next hearing of the case. ICICI Bank, which is negotiating sale of some of Wockhardt’s assets, will not enter into any agreement without the court’s permission and DBS being notified about the same.
Justice Dhananjay Chandrachud, who heard the case, has not allowed any interim relief but the understanding would be based on exchange of letter between the lawyers of both parties. He has scheduled the next hearing of the case on November 27 for final arguments.
When contacted, a Wockhardt spokesperson declined to comment, as the matter was sub-judice.
Last month, DBS had filed a winding up petition with the Bombay High Court which requested the court to liquidate Wockhardt and distribute its proceeds to its various lenders. The winding up petition followed the legal notices that the DBS had sent to the pharma company in September.
An industry analyst said this seemed like a bargaining tactic on DBS’s side to try and get a better deal from the CDR process.
Wockhardt’s foreign lenders have opposed the company’s CDR proposal which they said benefits the Indian banks. “This (DBS’ winding up petition) seems like purely a bargaining strategy to get a better deal. Wockhardt maybe cash strapped but its underlying business is good and if the company is to be liquidated no one will benefit,” said a leading industry analyst from an international broking firm.
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