MAX INDIA LTD. - Outcome of Board Meeting - Life Healthcare to equalize its stake in Max Healthcare at an Enterprise Value of Rs. 3650 Cr
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| 22 Jul 2014 | |
| Max India Ltd has informed BSE that the Board of Directors of the Company at its meeting held on July 22, 2014, accorded approval to achieve parity in shareholding in Max Healthcare Institute Limited (Max Healthcare) between the Company and its JV partner, viz., Life Healthcare Group (Proprietary) Ltd., a company incorporated and existing under the laws of South Africa (Life Healthcare) through a series of following corporate actions<br/><br/>(i) Divestment not exceeding 13.3% of existing equity stake held by the Company in Max Healthcare, at Rs. 67.50 per equity share, for an aggregate consideration of upto Rs. 383 crores in favour of Life Healthcare; and<br/><br/>(ii) Issuance of equity shares by Max Healthcare at Rs. 67.50 per equity share to Life Healthcare, on a preferential basis, for an aggregate consideration of upto Rs. 397 Crores.<br/><br/>The transaction translates to an equity value of Rs. 2,884 Crores for Max Healthcare based on the valuation of shares for the contemplated transaction. The shareholding in Max Healthcare as of date comprises of: (i) Max India - 65.86% equity stake; Life Healthcare 26% equity stake; International Finance Corporation (IFC) - 7.5% and the balance 0.64 % by the ESOP holders. IFC has a right to convert a portion of its outstanding optionally partially convertible preference shares and maintain its shareholding at 7.5% and/or exercise a proportionate tag along right along with Max Indias stake sale in Max Healthcare. The stake divested by Max India and fresh issuance by Max Healthcare could vary at the time of actual closure of the transaction depending on what IFCs decision with respect to its options.<br/><br/>Life Healthcare is the second largest private hospital operators in South Africa. It currently owns and operates 63 facilities with 8322 beds in a comprehensive geographic spread over seven South African provinces and Botswana. It is also a leading provider of acute rehabilitation and mental health services in the country.<br/><br/>Max Healthcare operates 12 hospitals in North India, with a focus on high end tertiary and quaternary care. It undertook an exponential phase of organic expansion a year ago, by launching four new hospitals in Delhi-NCR and North India to nearly double its capacity to almost 2000 beds. The companys revenue in FY 14 was Rs. 1,407 crore, a growth of 22% YoY. Its EBITDA in the same period grew by 59% YoY, to Rs. 113 crore.<br/><br/>The aforesaid transaction is subject to finalization and execution of definitive agreements and receipt of necessary regulatory approvals.<br/><br/>Further, the Company has issued a Press Release dated July 22, 2014 titled "Life Healthcare to equalize its stake in Max Healthcare at an Enterprise Value of Rs. 3650 Cr". | |
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