Wockhardt defaults on interest payment

Said a Crisil statement,8221;The downgrade follows a default by Wockhardt on the interest payment on the loan supporting the PTCs. Axis Bank Ltd,the trustee to the transaction,has confirmed the default. CRISIL believes that Wockhardt has chosen not to pay the debt obligation.8221;

On March 31,2009,Wockhardt had announced its decision to make a reference to the corporate debt restructuring cell through ICICI Bank Ltd for restructuring of its debt. Following the announcement,Crisil downgraded its rating on the PTCs to P4so and placed the rating on Rating Watch with Negative Implications based on its expectation of probable shortfalls and delays by Wockhardt in meeting its obligations on the loan underlying the PTCs. The watch reflected the uncertainty regarding acceptance by the lenders of the CDR,and the inclusion of the rated instrument in the scheme,Crisil said.

The rating continues to reflect the strained risk profile of Wockhardt,as reflected in its increased debt Rs 3,777 crore as on December 31,2008 compared with Rs 2910 crore as on December 31,2007,high adjusted gearing 3.75 times as on December 31,2008,and large debt repayments due in two years Rs 1,324 crore in 2009 and Rs 1,048 crore in 2010.