Goldman may convert part-debt into equity in PharmEasy

economictimes.indiatimes.com:

Goldman Sachs is likely to convert a part of the debt it advanced to PharmEasy into equity, following the upcoming rights issue of about $424 million (Rs 3,500 crore) by the online pharmacy that is due to open on September 4, sources aware of the matter said.

Goldman, which had issued a $300-million loan to PharmEasy, is in talks to convert around $38-40 million debt into equity. The rights issue is likely to value the e-pharmacy at $500-600 million. This is significantly lower than its peak valuation of $5.6 billion in 2021.

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Following binding commitments from existing investors in the rights issue, PharmEasy is restructuring the debt agreement with Goldman, negotiating for a lower rate of interest on the total loan. “The rights issue is slated to start September 4 and based on commitment from existing investors, the cash-position of the firm is looking better than six months ago. This has led to the (discussions about) restructuring debt terms and a conversion to equity,” said one person aware of the talks.


Likely to Repay $100-150 million of Debt

PharmEasy — which also owns diagnostics firm Thyrocare — is also likely to pay back about $100-150 million of debt to Goldman following the rights issue, according to sources in the know. Currently, PharmEasy has an obligation of Rs 30 crore (around $3.6 million) in quarterly interest payout.

“It (payback amount) could even hit $200 million based on how much money