Challenges in Neuland Health deal

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Steadview Capital’s acquisition of a stake in Neuland Health Science Private Limited (NHSPL) overcame legal and regulatory complexity due to subsidiary Neuland Laboratories Limited’s (NLL) status as a listed company, said a lawyer involved in the deal.

Luthra & Luthra Law Offices (L&L) advised alternative asset management company Steadview on a 32.89% stake for about US$25 million, along with other buyers in NHSPL. L&L also had to factor in the pending amalgamation of companies.

“The acquisition of a stake in NHSPL necessitated seeking and negotiating various contractual rights and obligations in respect of NLL as well,” said L&L partner Vaibhav Kakkar. “Such assumption of contractual rights in a listed company entailed various corporate governance and other compliance-related issues, which were required to be adequately addressed.”

Steadview and the other buyers acquired the stake from Evolvence India fund and other investors along with acquiring a stake in another Neuland group entity, Neuland Pharma Research Private Limited (NPRPL).

L&L advised on the transaction structure, resolved issues and mitigated risks from an Indian regulatory standpoint. The firm was also involved in preparation, negotiations and finalization on the transaction documentations and assistance in execution and closing of the transaction.

Kakkar and L&L partner Sundeep Dudeja worked on the deal with senior associate Avisha Gupta and associate Ranjini Gogoi.

In addition, L&L need to take the pending amalgamation of the NHSPL and NPRPL with NLL into consideration. Based on the effectiveness of the merger, Steadview and other investors in NHSPL and NPRPL will become shareholders of NLL. “This fact necessitated extensive structural and strategic advice to be provided to the investors, in respect of various aspects of the present transaction,” said Kakkar.