Domestic pharmaceutical major Wockhardt and some of its foreign currency convertible bond (FCCB) holders, engaged in a long-drawn legal tussle over the repayment of matured bonds worth $67 million (approximately Rs 300 crore), will open a new battle front in the middle of this month.
The civil court in Ahmedabad on August 16 will hear a defamation suit filed by Wockhardt promoters — the Khorakiwala family — against the company’s irate FCCB holders.
The hearing comes at a time when Wockhardt has agreed to sell its nutrition business to French food giant Danone for about Rs 1,600 crore last week. The bond holders, who had opposed and aborted a similar attempt by Wockhardt to sell the same segment of its business to US major Abbott last year, are known to be unhappy with the current agreement too.
On August 16, the court will hear Khorakiwala family’s petition to seek Rs 939 crore as compensation from bond holders for defaming Wockhardt promoters through accusations made in an affidavit filed by the bond holders in Bombay High Court in April 2011.
The bond holders had accused the Khorakiwala family of ignoring the shareholders and creditors’ interest by choosing to indulge in speculative derivative transactions and, despite having the means to do so, refusing to honour its obligations under the FCCB.
The Wockhardt promoters who filed the defamation suit against this and several other observations on June 29 had countered this view and felt that the “reckless and baseless statements made against the promoters” had become a major and critical issue for the entire family.
The promoters are seeking a “conservatively assessed at Rs 939 crore, being one-third of the Khorakiwala family’s market share price in the company as on the day of filing the suit” as compensation towards damages.
The bond holders who have been slapped with defamation suit includes BNY Corporate Trustees Services Ltd , Barclays Capital Services Ltd, QVT Fund LP, Quintessence Fund LP, Bank of Nova Scotia and Wockhardt’s local rival — Sun Pharma Global Inc.
The bondholders hold about $67 million (about Rs 300 crore) of the outstanding FCCBs worth $74 million (Rs 331 crore) in the company.
On September 6, the Bombay High Court will take up Wockhardt’s plea to give clearance to its decision to sell its nutrition business. The bond holders are expected to give their views on the company’s decision the same day.
Sources said the company and its creditors might also initiate talks for an out-of-court settlement.
Wockhardt declined to comment on the development. Repeated attempts to reach the representatives of bond holders were not successful.
