Turnaround Story of Wockhardt Limited

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Case Details:			Price:
Case Code	:	FINC086	For delivery in electronic format: Rs. 500; For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges Themes: Strategic Financial Management
Case Length	:	23 Pages
Period	:	1959-2012
Pub. Date	:	2013
Teaching Note	:	Not Available
Organization	:	Wockhardt Limited
Industry	:	Pharmaceutical
Countries	:	India

Abstract:

Wockhardt Limited was the fifth largest pharmaceutical company in India before it got into financial trouble in 2008. The company moved to the corporate debt restructuring cell in the first half of 2009 to get out of the trouble that was rooted in a mounting debt burden and huge losses in complex currency derivatives. After two years of continuous losses, Wockhardt was able to come back in the third quarter of 2010. However, its hurdles and legal dispute continued till late 2012.

Finance | Case Study in Management, Operations, Strategies, Finance, Case Studies

To come out of the crises, Wockhardt under the leadership of Habil Fakhruddin Khorakiwala, its Chairman, sold its noncore businesses, cut down costs, and kept a distance from derivatives. This ultimately revived the company, resulting in the fastest turnaround in Indian corporate history. The case study helps the students to analyze the turnaround of Wockhardt. It also discusses the importance of leadership in the turnaround of any company.

Issues:

Discuss the reasons for the trouble at Wockhardt.

Understand the steps and constraints involved in the financial restructuring of Wockhardt.

Understand the important role of operation efficiency during financially restructuring.

Analyze the management role in the restructuring of Wockhardt.

	Page No.
Introduction	1
History of Wockhardt	2
Demerger of Business into Two Companies	3
Wockhardt Acquisation Spree Through Leverge - Growth Phase	4
Trouble at Wockhardt - Declining Phase	6
Wockhardt Under Corporate Debt Restructuring	8
Liquidating Assets	9
Default on FCCBs Payment Consequences	10
Turndaround at Wockhard - Fruits of Restructuring	12
Wockhardt Acquisation Spree Through Leverge - Growth Phase	13
Another Attempt to Sell Nutrition Business	13
Surprising Financing Performance	14
Sale of Nutrition Business - Pay to Exit CDR	15
Looking Forward	16
Exhibits	17

Keywords:

Financial performance, Wockhardt Founder, Wockhardt, , Habil Khorakiwala, Turnaround ,Financial Distress, Debt-Equity ratio , Growth, FCCB, ,stock prices , Pharma company , Worli Chemical Works, Merind Ltd., CP Pharmaceuticals, Esparma GmbH ,Dumex India Pvt. Ltd.,Pinewood Laboratories, Negma Laboratories, Morton Grove Pharmaceuticals, RR Medi Pharma Ltd., Wallis Laboratories, Leverage

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