Mumbai-based drugmaker Wockhardt is in discussions with ICICI Venture, ChrysCapital and other private equity firms to divest a 15% stake. The country’s sixth-largest drug maker by revenue wants to raise funds to pay off investors in its USD 110-million foreign currency convertible bonds (FCCB) issue, which comes up for redemption next year. Two persons with knowledge of the development, but who did not wish to be named, told ET that Wockhardt is looking to raise USD 100 million (around INR 500 crore) from PE funds at nearly triple the premium over its current market price of INR 96.45 per share. However, the pharma company’s current market capitalisation is just USD 210 million (INR 1,050 crore) and it is unlikely that the buyers would pay nearly half the market value of the firm for a 15% stake. PE firms are looking for a more realistic valuation of the company. Under India’s takeover code, if a single investor buys 15% equity in a company, it has to make an open offer for buying an additional 20%. But if a clutch of investors together buy 15%, the open offer option does not get triggered. When contacted, a Wockhardt spokesperson told ET that the company does not comment on speculation. An email sent to an ICICI Venture official did not yield any response. Wockhardt’s FCCB issue is due for redemption in October 2009 at a conversion price of Rs 486 per share. With the Wockhardt scrip currently trading at less than Rs 100, the prospect of its share price reaching the Rs 486 level in the stipulated time are slim. “Ideally, Wockhardt would like to close the deal by March-April 2009 to repay the borrowings in time,” an official from a PE firm said. Another option available to Wockhardt is to raise debt, including ECBs, for taking care of the liabilities arising out of FCCB conversion. But the company’s debt obligations are already in the region of INR 2,800 crore, and with a debt-equity ratio of 2.3:1, its capacity to raise loans could be constrained. It is learnt that Swiss bank UBS is the advisor for Wockhardt in this transaction. When contacted, UBS India MD (investment banking) Probir Rao said: “I am not aware of any such development.” Wockhardt chairman Habil Khorakiwala holds a 73.64% stake in the company. The other major shareholder in the company is LIC, which owns 5%.