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Whirlpool Corporation, a leading appliance manufacturer, is set to offload a 24% stake in its Indian subsidiary this week, according to a term sheet accessed by Reuters. The transaction, facilitated through block deals, is anticipated to yield up to $451 million for the company. Whirlpool aims to execute the sale at a price of 1230 rupees per share, representing a 7.6% discount from Monday’s closing price. The deal is scheduled to be concluded by Wednesday.
The decision to divest a significant portion of its Indian unit comes as Whirlpool seeks to mitigate debt levels, as indicated in a filing made to U.S. regulatory authorities back in November. The company has faced consecutive quarterly profit declines, spanning six quarters up to December, attributed to heightened competition and price pressures in the market.
Goldman Sachs has been enlisted to advise Whirlpool on the stake sale, as revealed by the term sheet. However, neither Goldman Sachs nor Whirlpool has provided immediate comments on the matter.
The stake sale involves a minimum offering of 19 million shares in the Indian unit, valued at $282 million based on the proposed sale price. Additionally, Whirlpool retains the option to offer an extra 11.4 million shares, potentially generating an additional $169 million.
Whirlpool’s decision to divest comes amid a buoyant market environment in India, with benchmark stock indices nearing record highs. Factors such as robust economic growth and expectations of political stability ahead of upcoming elections have contributed to the optimism in the market.
The sale of stakes by prominent investors like Blackstone, Alipay, and SoftBank in Indian portfolio companies over the past year has bolstered investor confidence in offloading substantial shareholdings. This trend underscores the attractiveness of Indian equities to both domestic and international investors, further enhancing the liquidity and vibrancy of the Indian capital markets.
Sources By Agencies
