Drug maker Wockhardt's share price fell 11.11 per cent on Thursday on the Bombay Stock Exchange to Rs 76 per share, following the company's announcement last evening of talks with banks to restructure debt and plans to recast some units, besides promoter Habil Khorakiwala's stepping down as managing director.

Wockhardt had a net debt of Rs 3,400 crore (Rs 34 billion) as of December 2008. It was hoping to reduce this, sources said, by selling its Irish subsidiary, Pinewood Laboratories, and a stake in Habil Khorakiwala's privately-held Wockhardt Hospitals.

"Pinewood will be the first to be hived off, as a couple of London-based private equity players are interested in buying it," said an investment banking source. Wockhardt is looking to raise $150-200 million from the deal, but interested investors are quoting less, say sources. Wockhardt had acquired Pinewood for $150 million in October 2006.

A Wockhardt spokesperson declined comment. An e-mail sent on Tuesday to the chairman remained unanswered.

Khorakiwala is also in talks with former Ranbaxy [Get Quote] promoter Shivinder Singh's Fortis Healthcare [Get Quote] for a strategic investment in Wockhardt Hospitals, as reported earlier by this newspaper. "We are in discussions with multiple players for business expansion at any point of time. We will not comment on market speculation," said Sudarshan Mazumdar, marketing director and spokesperson for Fortis Healthcare.

Wockhardt, which has a chain of 17 hospitals, mainly in southern and western India, will be a strategic fit for Fortis Healthcare, since the latter's network of 26 hospitals is mainly in North India, according to analysts. Fortis is also planning to raise about Rs 1,000 crore (Rs 10 billion) through a rights issue to fund expansion. It aims to set up a network of 40 hospitals within three years.

Meanwhile, Khorakiwala said in a press release that the appointment of his sons -- Dr Murtaza Khorakiwala as managing director and Huzaifa Khorakiwala as executive director -- was to develop a long-term succession plan in the best interest of the company and its shareholders.

"This will give me an opportunity to mentor and develop the next generation leaders whilst I am fully involved in providing leadership, strategic vision and direction to the company's business operations," he said in a press statement.

Murtaza, who has a medical degree from India and has studied management in the US, has been working with Wockhardt since 2000. He worked with the UK subsidiary for three years and had been fully involved in the biotechnology business, manufacturing and operations of the acquired facility in France, Negma Laboratories, said the statement.