Litigation shadow off Rs 1,280-cr deal

Mumbai, July 26:

The uncertainty over drug maker Wockhardts sale of its nutrition business to Danone has ended.

The company has closed the Rs 1,280-crore transaction, Wockhardt said on Thursday.

Despite the deal with Danone being formalised last August, Wockhardt had some heart-stopping moments, as litigation involving its unhappy bond-holders cast its shadow on this deal as well.

An attempt in 2009 by Wockhardt to sell its nutrition business to Abbott fell through precisely for that reason Wockhardt was unable to resolve debt restructuring issues with some of its lenders.

The Abbott deal was for Rs 600 crore. But Wockhardt sealed the Danone deal at Rs 1,600 crore.

Of this amount, about Rs 640 crore would go to Wockhardt Ltd, and an equal amount to Wockhardt EU, and Rs 320 crore to Carol Info Services, a source familiar with the deal said.

But worries over the Danone deal increased as the March 2012 timeline to seal the deal, mentioned by Wockhardt Executive Chairman Dr Habil Khorakiwala, also lapsed.

Debt-saddled Wockhardt had started exiting non-core businesses after it hit the hard times in 2008.

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Wockhardt closes nutrition business sale to Danone