Turnaround Story of Wockhardt Limited

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In February 2011, after eight quarters of continuous losses, Wockhardt reported a positive result for the December quarter. The company reported a Rs. 1.4 billion profit compared to a Rs. 1.8 billion loss in same period of the previous year. The company also witnessed a 7% growth in sales from Rs. 8.9 billion in the December quarter of 2009 to Rs. 9.5 billion in the December quarter of 2010. launches. The company’s UK market grew by 10%. On the other hand, the company was able to reduce the overall expenses by 6.4% and increase margins by about 10% compared to the same period of the previous year...

In May 2004, Wockhardt acquired Esparma GmbH (Esparma), a German company, for US$11 million, funded through internal accruals. Esparma had a significant presence in urology, neurology. and diabetology, which was in line with Workhardt’s therapeutic strengths. Wockhardt acquired only Esparma’s brand, businesses, and sales and marketing organization - not its manufacturing facility However, Wockhardt decided to use the manufacturing facility for two years before production shifted to the company’s own facility in the UK and India...

On August 2, 2011, Danone signed an agreement to purchase Wockhardt’s nutrition business including brands and related business operations from Carol Info Services Limited (Carol Info) for about €250 million or about US$ 356.3 million or about Rs. 16 billion. , Wockhardt and its subsidiary would get about Rs. 12.8 billion and Carol Info about Rs. 3.2 billion. The deal size was more than double the deal with Abbott in 2009. On August 3, Wockhardt filed an application in court to get legal clearance on the sale of the nutrition business which was mandatory because the company was facing a winding up petition...

On November 12, 2011, Wockhardt reported a Rs. 1.3 billon net profit in the second quarter ended on September 30, 2011, compared to the Rs. 967 million net losses in the same period a year ago. On February 13, 2012, the company reported its third quarter results. The net profit had increased by 50% to Rs. 2.1 billion in Q3FY12 from Rs. 1.4 billion in Q3FY11. In the same period, sales also increased by 20% to Rs. 11.4 billion from Rs. 9.5 billion...

In July 2012, Wockhardt completed the sale of its nutrition business to Danone for a consideration of Rs. 12.8 billion. On August 6, 2012, the company announced its Q1FY13 results. The company reported 95% growth in net profit to Rs. 3.8 billion from Rs. 1.9 billion in Q1FY12. By August 21, 2012, Wockhardt had paid off its US$73 million of dues to bondholders as per the schedule set by the court. However, in the final payment of US$32.9 million, a dispute arose between the bondholders and the company. According to the bondholders, the actual final payment was US$35.1 million (US$32.9 million + US$2.2 million toward redemption premium and interest). On this difference, Wockhardt filed a petition in the court against the bondholders....

The successful turnaround of the Wockhardt was a remarkable achievement for the management of the company, especially for the 70-plus Habil, who got FC’s Businessman of the Year 2012 award in December 2012. Y K Hamied, Cipla Chairman, said, "Hats off to Habil. What he has done in the past one year has been super remarkable. By the looks of it, it will keep on improving."...

Exhibit I: Various Company Acquired by Wockhardt
Exhibit II: R&D Expenditure by Wockhardt in Various Years
Exhibit III:Key Elements of our Package as Approved by CDR
Exhibit IV: Consolidated Financial Highlights of Wockhardt Limited (in Rs. million)
Exhibit V: Geography-wise Sales Revenue of Wockhardt

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