Khorakiwala-owned Humuza Consultants has pledged its entire 65.46% shares of Wockhardt with private lenders as of March 31, 2023, according to a stock exchange disclosure.
The promoter intends to reduce the share pledge to 26% by the end of this fiscal year, the people cited above said.
The borrowing at promoter level against share pledge is about Rs 850 crore.
“The outstanding promoter loan as on 30th June 30, 2023, will be around Rs 750 crore,” Wockhardt said in an email response. “The total interest on loan will be approximately Rs 110 crore.”
The company did not comment on the proposed reduction in share pledge by the end of this year.According to people cited above, company officials have informed lenders that the debt reduction will be done without raising new loans.The promoter had pledged 52.7% shares in September 2022, but due to a correction in Wockhardt’s share price, the promoter had to pledge additional shares by the end of March 2023, one of the persons said.
Between September 2022 and March 2023, Wockhardt’s shares fell from Rs 270 to Rs 150.
The reduction in promoter-level debt will give lenders comfort in giving additional capex-related loans since this will create some headroom for raising fresh loans at holdco level, one of the lenders said.
Standard Chartered Investments Loans (India) Ltd, Anand Rathi Global Finance, and Arka Fincap are some of the lenders at holdco level.
State Bank of India, Bank of Baroda, ICICI Bank, Punjab National Bank and IDBI Bank, too, are among the lenders.
The company’s Rs 517-crore long-term debt and Rs 225-crore bonds are rated as BBB- and Rs 171 crore short-term debt is rated as A3 by Care Ratings, according to a June 6 statement.
Wockhardt’s net loss widened to Rs 621 crore in FY23 from Rs 279 crore a year ago while revenues dropped 17% on year to Rs 2,693 crore.
The losses were on account of impairment charges of Rs 123 crore related to the closure of Morton Grove plant in the US due to regulatory compliance issues.
The drug maker consented to pay $36 million over nine instalments between 2022 and 2025 to the State of Texas in a drug pricing case that alleged that it was overcharged for drugs supplied to the Texas Medicaid Program.
Also, the company’s revenue from Covid-19 vaccine, mainly sold in Europe, declined from Rs 550 crore in FY22 to negligible in FY23. The revenue from other therapeutic products and geographies didn’t see much improvement.
Despite financial difficulties, Wockhardt is pursuing development of six new chemical entities (NCE) to treat various bacterial infections.
Two out of the six drugs have been approved by the Drug Controller General of India (DCGI) and are being marketed in India.
Last August, Wockhardt commenced global phase 3 clinical trials of lead candidate WCK5222. The company is relying on commercialisation of its NCE programme to boost revenues.
Shares of Wockhardt rose 0.48% on the BSE on Tuesday to close at Rs 232.65, while the benchmark Sensex gained 0.71% to end at 63,416 points.
