Torrent is working on assembling an INR 60,000 Cr. ($7 billion) financing package to acquire Cipla. Its founders plan to leverage this ownership to raise funds by creating a non-disposable undertaking (NDU) using shares as collateral for loans.
Ahmedabad-based Torrent Pharmaceuticals has entered into advanced negotiations with Luxembourg's CVC Capital Partners to raise investment estimated around $1.2-1.5 billion for its proposed acquisition of rival company Cipla.
Torrent is actively working on assembling an INR 60,000 Cr. ($7 billion) financing package to acquire Cipla, revealed an Economic Times report.
Furthermore, the Ahmedabad-based pharma-power is looking to form a consortium with CVC Capital Partners to raise the required funds from the European buyout fund.
Reportedly, Torrent Pharmaceuticals has been in discussions with private equity firms, including Bain Capital, to potentially form a larger consortium. While Torrent has been exploring the possibility of Bain Capital being a co-investor, it is leaning towards choosing CVC as its lead partner.
Additionally, Torrent is actively engaged with Brookfield to secure mezzanine debt in the range of $1-1.2 billion (INR 8,300-9,000 Cr) as share-backed promoter financing.
Moreover, Torrent's founders plan to leverage this ownership to raise funds by creating a non-disposable undertaking (NDU) using shares as collateral for loans. The exact funding amount has not been finalised, but Torrent has been exploring various avenues to secure the necessary funds, with the intention to conclude this process by the end of September before proceeding with their offer.
Reports suggest that both CVC and Brookfield have the capacity to raise their commitments to as much as $2.25 billion (INR 18,675 Cr) and $1.5 billion (INR 12,450 Cr), respectively, in case Torrent's discussions with other capital sources, including domestic shadow banks and mutual funds, do not yield the desired results.
Furthermore, several foreign banks, including Standard Chartered Bank, Barclays, MUFG, Citi, and Morgan Stanley, are in the process of securing a senior debt facility of INR 30,000 32,000 Cr ($3.8 billion) for a three-year term against the cash flows of Torrent and Cipla.
In another related event, the global healthcare company Cipla launched CiplaMed 2.0 in August this year. The initiative offers reliable and latest updates to medical professionals. The platform is an advanced version of an industry-leading knowledge platform that provides information to the medical fraternity.