PharmEasy breaches Goldman Sachs loan covenant after failing to raise equity

PharmEasy, the prominent pharmacy unicorn, has reportedly breached its loan covenant terms with Goldman Sachs, a leading US-based lender, within a year of securing a high-cost debt from the financial institution. The loan agreement stipulated that PharmEasy must raise equity worth approximately Rs 1,000 crore (around $120 million), which was tied to its burn rate velocity.

But PharmEasy failed to fulfill this requirement, despite making efforts for a year and experiencing delays in its planned initial public offering (IPO). It is important to note, however, that PharmEasy has not defaulted on any of its payment obligations thus far.

In August of the previous year, PharmEasy had procured a loan of Rs 2,280 crore (equivalent to $285 million) from Goldman Sachs. The purpose of this loan was to settle a previous debt incurred by PharmEasy from Kotak Mahindra Bank, which was utilized to acquire Thyrocare.

The loan from Goldman Sachs, with a duration of five years, carried a substantial annual interest rate of 17-18%. As PharmEasy strives to address its breach of loan covenant terms, the situation highlights the challenges faced by the company in raising the required equity and meeting its financial commitments.

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