Pharmaceutical major Wockhardt, which is trying to repay its debts of over Rs 3,400 crore (Rs 34 billion), announced on Sunday it had signed an agreement to divest its animal health division to Vetoquinol, a French veterinary care company.
Sources said the deal was worth Rs 170 crore (Rs 1.7 billion). Wockhardt's animal health business had net sales of Rs 77 crore (Rs 770 million) for the year ended December 31, 2008.
The deal is subject to necessary administrative approvals and should take effect in the second half of 2009, said the press release.
Vetoquinol, a family-owned group specialising exclusively in animal health, is the 11th largest animal health company in the world. Nearly 80 per cent of Vetoquinol's revenues come from outside France, said the release.
Wockhardt had already got shareholder approval to sell its animal healthcare division. French veterinary major Virbac, multinational Sanofi-Aventis and Pfizer were interested, sources said. Pfizer has acquired Vetnex, the animal health business of RFCL Ltd from ICICI Venture.
Wockhardt, which is currently trying to restructure its loans through a corporate debt restructuring, had sold its German subsidiary Esparma to Mova GmbH, a subsidiary of German company Lindopharm GmbH, for Rs 120 crore (Rs 1.2 billion).
The company has to repay foreign currency convertible bonds worth over Rs 600 crore (Rs 6 billion) by October and has pledged various assets to meet liabilities.
High-value acquisitions in the past and losses from foreign currency transactions caused huge losses for the company. The company posted Rs 159 crore (Rs 1.59 billion) loss on sales of Rs 3,592 crore (Rs 35.92 billion).
Wockhardt Chairman Habil Khorakiwala-promoted Wockhardt Hospitals is also trying to rope in a strategic investor, either by sale of minority stake in the hospital chain or of two or three standalone hospitals in Mumbai, Bangalore and Kolkata, with plans to raise about Rs 750-900 crore (Rs 7.5-9 billion).
Wockhardt's other overseas assets, such as Morton Grove of the US and French subsidiary Negma Laboratories are also on the block, sources said.
The company is planning to hive off the biotech assets to a separate business and may rope in a strategic investor, they said.