Debt-ridden drug maker Wockhardt today said it has placed its French subsidiary under a court supervised restructuring in order to re-organise its business.
In a filing to Bombay Stock Exchange (BSE) Wockhardt Ltd said, "Wockhardt France and some of its subsidiaries have been placed under safeguard proceedings..."
Safeguard proceedings are mechanisms to turn around a failing company speedily and efficiently, under which debtor remains largely in control of the business but under the supervision of a court appointed administrator, and ultimately the Court.
Wockhardt France, which is a subsidiary of Wockhardt EU Operations (Swiss) AG, is solvent and the safeguard helps the company to reorganise its business to be viable, it added.
The Mumbai-based firm has been reeling under a severe debt and has been undergoing a corporate debt restructuring process. As part of debt restructuring, it has sold off several non-core businesses, including animal health and nutrition.
The company sold its Animal Health Division to France- based Vetoquinol for an estimated Rs 170 to 180 crore, in June last year.
Wockhardt said the move to divest its non-core business is a step towards its continued growth plan and a firm focus on its core human pharmaceutical business.
The company also said earlier it had lost patent protection Diacerin, an anti-inflammatory analgesics and antipyretic drug, through a court challenge, it said.
In the meantime, it has developed a successor with a new technology from the R&D facilities in India which is undergoing clinical trials in France with over 500 patients, it added.
The company would be filing the submission by the first quarter of 2011 and the product is likely to be marketed in the first semester of 2012, based on the clinical trial outcome, it said.
Shares of Wockhardt today closed at Rs 316.45 on BSE, down 2.68 per cent from its previous close.