WOCKHARDT’S REVIVAL AFTER RESTRUCTURING

After defaulting on $110 million in overseas bonds in 2009 and renegotiating payment on Rs 1,300
crore in loans, the generics maker is nearly free from a bitter process of debt recast and enjoyed a furious
stock rally by 2014.Wockhardt's imminent emergence from India's corporate debt restructuring (CDR)
system is widely seen as a turnaround success.ters

Wockhardt's is one of the very few companies in the CDR who have come out and paid everything. In
the year 2014. Wockhardt has seen its shares soar nearly 350 percent to record highs, lifting its market
value to $2.45 billion. Its forward price-to-earnings ratio of 12.7 times is lowest among larger-cap
Indian pharmaceutical companies, most of which trade at around 20 times or more.

It ran advertisements to crow about its success: 23 percent sales growth in the last fiscal year and a net
debt to equity ratio now below 1, reduced from 5.5 times in March 2010. After keeping a low profile
since 2009, Wockhardt held its first investor relations meeting next in the year 2014.It has become more
or less a very normal company,"

DEBT AND DERIVATIVES

Wockhardt, which racked up debt when it spent $453 million on three overseas acquisitions, was pushed
over the edge by losses of 5.55 billion rupees on foreign exchange and derivatives during the global
financial crisis in 2008.The company, which generates 75 percent of its sales abroad, entered India's
CDR process in June 2009 to restructure about 13 billion rupees in loans, largely from Indian banks,
led by ICICI Bank. Its foreign banks settled separately.

Wockhardt tried to ease its debt load in 2009 by selling its nutrition business to Abbott Laboratories Inc
, but holders of its U.S. dollar convertible bonds blocked the move in court, saying they were not
consulted. In the 2013 it announced a $355 million deal to sell the nutrition business to France's Danone
, which bondholders ultimately went along with. That deal closed in 2014.

Wockhardt's reputation and share price took a hit and it was forced to sell assets during its restructuring
but its business remained robust. While Khorakiwala's promoter group had to pledge most of its 74
percent stake as collateral, it did not suffer equity dilution.

It underscores the fact that if the business model is strong, the CDR is a good mechanism to deal with
on a short-term basis as it helped to stabilise the company could focus on operations, it resulted in the
turnaround situation.