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. 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.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• 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

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