Beleaguered drugmaker Wockhardt has a new management team in place to implement a three-year strategic plan to get back on track. The company has seen at least four senior-level exits in the last few months.
The new executives in the management team include Vice-President- Finance, Europe Ajay Sahni and Senior Vice-President-Manufacturing Raju Krishnaswamy. Sahni is also president of Wockhardt France.
Only four executives from the earlier management team remain: Wockhardt UK Managing Director Sirjiwan Singh, President-India and Emerging Markets Sunil Khera, President & Research Head Yatendra Kumar and President-Supply Chain, Quality Generics and API Sales Sanjeev Mehta. Singh also heads Wockhardt’s Irish subsidiary, Pinewood Laboratories.
Chairman Habil Khorakhiwala and his two sons, Managing Director Murthaza and Executive Director Huzaifa, remain on the top deck. The departures have meant there is now a truncated top management team comprising nine members instead of the earlier 11.
"A three-year strategic plan has been created and a corporate governing council, drawn from the talented ranks of our global management team, is charged with ensuring the plan is delivered," Khorakhiwala told shareholders in the latest annual report.
The plan envisages strict cost control, creating a large branded generics portfolio in the domestic market and forays into rural markets and bio-generics. Also planned are strategic alliances with multinational companies and contract manufacturing. These initiatives will be spearheaded by the governing council, said persons familiar with the revamp.
Currently, 51 per cent of Wockhardt’s Rs 4,500-crore turnover comes from Europe, which is no longer a major attraction for generic drug companies. The US contributes another 18 per cent and India contributes only 27 per cent.
Habil Khorakiwala could not be contacted for further details. An e-mail sent to the company's spokesperson remained unanswered.
Wockhardt’s debt has mounted in the past three years following a string of overseas acquisitions and it suffered large mark-to-market losses. In July 2009, lenders agreed to restructure loans worth Rs 3,500 crore.
A group of foreign currency convertible bondholders had filed a winding-up petition against the company for failing to pay off loans. That petition is still pending in the Bombay High Court. Drug major Sun Pharma arm Sun Pharma Global, which is also an FCCB holder, recently moved the high court demanding it honour the original terms.
The problems prompted several senior executives to leave the company. They included Manish Gupta, who was managing director of Pinewood Laboratories. Kurt Orlofski, who joined Wockhardt in April 2007 as president and head of Wockhardt's US business and acquired subsidiary Morton Grove Pharmaceuticals, left the company in August last year.
Another key executive in the earlier management team, Rajiv B Gandhi, who was chief financial officer, company secretary and whole-time director, was forced to quit after market regulator Securities & Exchange Board of India found him and two relatives guilty of insider trading. Khorakhiwala brought in JB Manmadkar as the new company secretary.
Another member of the management team, Abbas Master, who was president for projects, also left the company a few months ago, said sources.
Shares rise on deal buzz
Wockhardt shares rose to a 52-week high of Rs 318.10 on a buoyant Bombay Stock Exchange on Friday, after a TV channel reported the company has revived plans to sell its nutrition business to multinational drugmaker Abbott for a higher valuation of Rs 900-1,000 crore. Wockhardt closed at Rs 314.60 on the BSE, a gain of 6.84 per cent. The channel said it could not confirm the development with either Abbott or Wockhardt.
