Wockhardt has QVT support for $110 million convertibles restructuring

By Jennifer Chiou

New York, Feb. 22 - QVT Advisors Private Ltd. announced full support for the restructuring plan proposed on behalf of holders of Wockhardt Ltd.'s $110 million of foreign-currency convertible bonds.

QVT said in a news release that it believes the restructuring plan for the defaulted bonds is in the best interests of Wockhardt and all creditors of the company.

Under the restructuring proposal, bondholders will exchange their bonds for newly issued five-year foreign-currency convertible bonds with the following terms:

• 5% coupon, payable semiannually;

• Mandatory conversion into the company's shares at maturity;

• Issuance at a ratio of 1.295 new FCCBs for each defaulted bond; and

• Conversion price at a premium to the company's share price on the date of maturity of the current bonds.

According to the release, QVT is disappointed that neither Wockhardt nor the corporate debt restructuring lenders have engaged in a meaningful dialogue with the bondholders in regard to the plan.

QVC added that Wockhardt is facing a winding up petition in the Honorable High Court, Mumbai, as it has defaulted on its obligations under the terms of the bonds.

If the company continues to ignore the efforts made by the holders of the defaulted bonds to salvage the situation by restructuring the debt in a mutually acceptable manner, Wockhardt may remain exposed to this winding up action, the release noted. This may restrict the company from selling its nutrition business.

QVT said it believes the restructuring plan will help reduce the company's current debt burden and increase liquidity.

Mumbai, India-based Wockhardt is a technology-driven pharmaceutical and biotechnology company.

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