UPDATE 1: 7:46 a.m. ET 5/16/2022:
Editor’s Note: This story was first published in the evening on May 16, and has been republished during normal business hours to reach a wider audience.
Barclays and Deutsche Bank, arrangers of the around $500 million three-year loan for promoters of Manipal Health Enterprises Pvt. Ltd. (MHEPL), are targeting Asian debt funds for syndication of the facility, said two sources familiar with the matter.
Continue reading for more reporting and analysis of Manipal's loan syndication, and request a trial to access more actionable insights from Reorg's Asia Core Credit team.
The loan, paying a margin of 8.5%, is targeted for promoters to buy back part of the minority stake which U.S. private equity firm TPG Capital has held in the Indian hospital operator since 2015, when it
announced that it was taking a significant minority stake in MHEPL for INR 9 billion ($145 million).
Local press
reported today, May 16, that TPG holds 21.5% of MHEPL. Other significant investors in the company, a unit of Manipal Education and Medical Group (Manipal Group), include Singapore’s Temasek and India’s National Infrastructure Investment Fund (NIIF).
The same report notes that plans are for an initial public offering (IPO) of the company in the next two to three years. The sources noted that IPO plans for Manipal have been pushed back, necessitating the promoter loan to provide a partial exit to TPG.
TPG is currently in fundraising mode for its eighth Asia fund, and CEO Jon Winkelreid was reported as saying during the firm’s recent first-quarter 2022 earnings call that it was eyeing a first close of Asia VIII by around the middle of this year. The firm’s 2012 vintage $3.27 billion Asia VI fund has a realised value of $2.4 billion and unrealised value of $4.9 billion, according to the firm’s earnings.
After a strong 2021, India’s IPO markets have slowed due to volatile markets in the first quarter of this year, and new issues are listing at a discount,
according to local reports.
India saw 16 IPOs in the first quarter of the year against 23 IPOs a year earlier, according to a May 16
mint report, citing EY statistics.
TPG declined to comment. MHEPL did not respond to requests for comment.
–Stephen Aldred
Original Story 6:49 a.m. UTC on May 12, 2022
Manipal Health Enterprises Mandates Barclays, Deutsche for $500M 8.5% 3Y Loan, Proceeds to Buy Out TPG Capital Stake, Refinance
Bengaluru-headquartered Manipal Health Enterprises Ltd., a unit of Manipal Education and Medical Group, has mandated Barclays and Deutsche Bank for a $500 million three-year loan to buy out TPG Capital’s stake in the company and for refinancing, according to four sources familiar with the matter.
The margin is expected to be around SOFR+ 8.5%, the first two sources said.
TPG took a significant minority stake in Manipal Health Enterprises for INR 9 billion ($145 million), according to a Feb. 26, 2015
announcement on the TPG website.
Manipal Academics Services International (MASI), a Mauritius-based company belonging to the Manipal Education and Medical Group’s education vertical, had recently been mulling a debut dollar bond of $400 million to $450 million, a fifth source familiar and three of the above sources said.
However, the plan to raise the funds through dollar bonds was put on hold due to a lack of investor appetite and unfavorable market following the Federal Reserve
rate hike, two of the sources added.
The Federal Reserve last week raised its benchmark overnight lending rate by half a percentage point to a target range between 0.75% and 1%, according to a May 5
Reuters report.
All deals that were marketed a few weeks or a month ago will undergo a rate revision, two of the sources said.
Barclays and Deutsche Bank declined to comment. Manipal Education and Medical Group, and TPG Capital did not respond to requests for comment.
– Poonam Bansal, Dipika Lalwani