P.T. Jyothi Datta

Mumbai, Nov.27

Singapore-based bank DBS and Wockhardt have come to a settlement on the winding up petition the bank had filed against the drug-maker.

The winding up petition had been filed in the Bombay High Court by the bank, raising questions on the company's corporate debt restructuring exercise (CDR). The foreign bank had said that the CDR process had been undertaken by the debt-ridden company without taking it on board — something that Wockhardt has refuted.

On Friday, the issue came up for hearing at the Court, following which both parties signed a consent decree, later in the day, a legal source familiar with the development told Business Line. DBS has possibly filed this with the Court in the evening, the source added.

While the terms of the consent decree were not immediately available, the source said, they may have reached an agreement on the outstanding derivative amount.

At an earlier hearing, counsels for foreign lenders had expressed their clients' displeasure to the options placed before them: where Wockhardt offered to buy back the FCCB at a discount to the conversion price. Those who did not take the buyback option were offered an exchange of their bonds for preference shares, convertible partly in 2015 and in 2018.

More petitions

Other foreign banks, including Barclays, have also filed similar petitions in the Court against the drug-maker. This is expected to come up for hearing in mid-December.

Foreign lenders had also expressed concern on Wockhardt's strategy to sell its assets. How this pans out with DBS' settlement remains to be seen.

Wockhardt's debt is at about Rs 3,700 crore. And DBS counsel had at an earlier hearing told the Court its liability was about Rs 130 crore. Wockhardt had approached the CDR Cell through ICICI Bank and in July this year, Wockhardt's CDR package was approved by the CDR Empowered Group.

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