An Indian court ordered Wockhardt Ltd. (WPL), a maker of diabetes drugs, to pay 3.15 billion rupees ($64 million) to holders of its foreign currency convertible bonds following a default, Bloomberg UTV reported today.
The settlement, including interest and a redemption premium, should be made in five installments in the eight months to August, the television channel said, citing the Bombay High Court order. Failure will result in the appointment of a liquidator for the company, the channel said.
The ruling clears the way for Mumbai-based Wockhardt to proceed with the sale of its nutrition unit to France’s Danone for 250 million euros ($340 million). The court had earlier blocked the sale pending resolution of a case filed by creditors after default. Danone (BN) announced the deal in August.
Wockhardt rose 10.2 percent to 443.80 rupees at 2:30 p.m. Mumbai time, set for the biggest gain since Nov. 15. The benchmark BSE India Sensitive Index was little changed.
A group of three bondholders including U.S. hedge fund QVT Financial LP and an overseas unit of India’s Sun Pharmaceutical Industries Ltd. (SUNP) filed the petition after Wockhardt defaulted on the convertible bonds that matured in October 2009.
The court ordered Wockhardt’s chief financial officer to provide an affidavit within two weeks specifying the payment schedule, the channel said. Creditors were also allowed to withdraw 1.15 billion rupees deposited by the company, as ordered by the court earlier this year.
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