Whirpool Mauritius Ltd, a promoter entity of Whirpool of India, plans to sell as much as 24 percent of the local unit via a block deal for $451 million, according to multiple industry executives familiar with the deal terms.
The promoter group, which currently owns 75 percent of the home appliance maker, had earlier indicated that it would reduce its stake in the company to reduce debt levels.
On November 30, 2023, Whirpool Corp said it would sell up to 24 percent of its ownership interest in Whirlpool of India Ltd to reduce debt levels.
"The base size of the deal is $282 million, which represents 15 percent of outstanding share capital and the upsize option of the deal is up to $169 million, which represents 9 percent of outstanding share capital," said one of the people cited above.
A second person told Moneycontrol that the floor price for the proposed block deal is Rs 1,230 per share, a 7.6 percent discount to the last trading price of Rs 1,331.20.
A third person told Moneycontrol that Goldman Sachs was acting as the advisor on the deal.
All three people spoke on the condition of anonymity.
Goldman Sachs didn't immediately respond to the email queries sent to both firms. When contacted by Moneycontrol, a Whirlpool spokesperson said, "in line with Whirlpool Corporation’s announcement in November 2023, if and when a transaction is executed, we would expect to update the market with that information via a public announcement."
Moneycontrol has also reviewed the termsheet of the proposed block deal.
The Whirlpool Corp India strategy
The regulatory disclosure in November by parent Whirpool Corp said that the parent intends to retain a majority interest in Whirpool of India following the completion of the planned stake sale.
"The company expects to use transaction proceeds to reduce debt levels, which will enhance balance sheet flexibility. Proceeds expected to be used for debt repayment are incremental to the $500 million term loan repayment that the company previously disclosed it expects to pay in the fourth quarter of 2023," the disclosure added.
It further added, "The company continues to see India as a significant marketplace for growth and an integral part of the company’s growth strategy. The company remains committed to expand the business with new product launches and the recently acquired Elica India business. The company does not anticipate this announcement to impact previously issued full-year guidance."
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