Wockhardt, which is facing a cash crunch to repay its liabilities, has started retrenching workforce in Europe, citing the ongoing global economic downturn.
Wockhardt UK, one of the top ten generic drug makers and the second largest hospital generics supplier in the UK, has axed 18 jobs, including 15 permanent employees, at its Wrexham manufacturing facility, according to a report.
Wockhardt earns over 54 per cent of its Rs 2,650-crore revenues from Europe, where it acquired facilities in the UK, Ireland, France and Germany. It employs about 6,000 people worldwide and of this, 1,500 are in Europe. The facility employs about 330 employees.
"Our customers in the US are unable to get finance to buy our products and when they pull the plug, it has a direct impact on our business," Sirjwan Singh, managing director of Wockhardt UK, was quoted as saying in the Evening Leader daily. An e-mail sent to Wockhardt chairman Habil Khorakiwala did not elicit any response. Its spokesperson said the company could respond only by tomorrow. Meanwhile, Wockhardt has said an extra ordinary general meeting of the company today approved to raise Rs 500 crore through the issue of redeemable preference shares.
The funds are for the redemption of FCCBs and for general corporate purpose, said a company release.
Wockhardt has to repay FCCBs amounting to $110 million, which is due for maturity in October 2009. Crash of capital markets a few months ago also forced the Group to a much-publicised initial public offer to raise about Rs 800 crore for expanding its hospital network. The company also informed the stock exchanges to submit audited financial results for the entire financial year ended December 31, 2008 only by on or before March 31, this year.
The US Food and Drug Administration approved UK facility mainly does contract manufacturing for companies such as Amylin Pharmaceuticals, Cephalon, Schering Plough, GW Pharmaceuticals, Mitsubishi Tanabe Pharma Corporation and Fidia Farmacuetici SpA. The company had shed about 90 jobs in 2007, as part of integrating the facility and moving part of its production to facilities in India. Then the company had about 400 people. Wockhardt UK was formed in 2005 by merging Wallace Pharmaceuticals and CP pharmaceuticals, two facilities Wokhardt acquired in UK. One of the plants of Wallace at Luton was also sold to Bristol Laboratories.
In October 2007, another Indian contract manufacturing major Piramal Healthcare (then Nicholas Piramal), had trimmed about 70 employees at its acquired facility at Morepath, UK.