Abu Dhabi Investment Authority understood to be mulling investment in parent of India's largest private sector hospital chain
Abu Dhabi Investment Authority (ADIA) is understood to be in talks with Apollo Hospitals Enterprise, which runs India’s largest private sector hospital chain, to make an investment in its holding company, PCR Investments.
Sources in Apollo Hospitals said the total investments PCR Investments Ltd is looking for could be about $150 million.
The investment is required to bring down the debt of the company and redeem the promoter family’s shares pledged with institutions. Currently, about 75 percent of the family’s shares are pledged with company lenders.
When asked about ADIA’s talks with Apollo Hospitals Enterprise, Sangita Reddy, joint managing director of Apollo Hospitals Enterprise, told Arabian Business that there are some preliminary talks going on with some investors but she was not privy to the details.
A senior finance executive of Apollo Hospitals Enterprise told Arabian Business that the company is talking to several investors but “as of now, there is nothing specific on this to share”.
The company executive said Apollo Hospitals have very good relationship with several PE and fund investors including ADIA and that it is premature to say at this juncture whether the required investments in PCR Investments Ltd will be made by one investor or multiple investors.
Abu Dhabi Investment Authority declined to comment on the issue.
Apollo Hospital sources said the promoters shares pledged with the lenders will come down to 35-40 percent once part of the company debt is settled from the proceeds from the sale of its insurance joint venture with Munich Re.
HDFC Ltd has acquired 50.8 percent stake of Apollo Hospitals Group in Apollo Munch for about $195 million last month.
The family of Pratap C Reddy, founder of Apollo Hospitals, hold 34 percent stake in the healthcare company, which is listed on the Indian bourses.
Apollo Hospital sources said the total debt PCR Ltd is about $253 million and once the debt is partly settled using the proceeds from the sale of the group’s insurance business, the fund requirement for settling the remaining debt will be only about $150 million or so.
“The family (promoter) is committed to bring down the overall pledged shares to 20 percent over the next 12 to 18 months, and the company is looking at various options to raise resources, including from strategic investors for achieving this,” the company finance executive said.