Delhi-based Max Healthcare has entered into strategic collaboration with Lakshdeep Group for acquisition of a 64 per cent controlling stake in Jaypee Healthcare Ltd for an enterprise value of ₹1,660 crore.
Jaypee Healthcare is a subsidiary of the debt-ridden Jaypee Infratech; and is currently going corporate insolvency proceedings.
Max Healthcare will have the option to acquire the remaining 36 per cent at a later stage.
Acquisition will be for a cash consideration, including refinance of debts of Jaypee Healthcare.
This acquisition will give Max Healthcare access to Jaypee’s flagship asset, the 500-bed facility at Noida. This apart, acquisition will also include the 200-bed Jaypee Hospital Bulandshahr. Jaypee Healthcare also owns a 100-bed hospital at Anoopshahar, which is currently non-operational.
Jaypee Healthcare reported a revenue of ₹421 crore and EBITDA of ₹70 crore in FY-24.
In a stock market notification, Max Healthcare said, the board has approved execution of strategic collaboration agreement with Lakshdeep Investments and Finance Private Ltd and Lakshdeep Infrastructure and Holdings Private Ltd (collectively referred as Lakshdeep Group).
Lakshdeep Group entities are indirect holding companies of Jaypee Healthcare, who have been permitted to work out or submit a viable plan or solution in relation to latter’s revival.
The NCLAT on September 12 has approved the settlement agreed to between Lakhsdeep Group and the Committee of Creditors (CoC)of Jaypee Healthcare.
“Max Healthcare as strategic partner under the aforesaid arrangement, shall enter into an agreement to acquire 64 per cent equity stake of Jaypee Healthcare within 30 days of NCLAT order,” it said.
It also “proposes to enter into option agreement for acquisition of remaining 36 per cent equity stake”.
“The acquisition of Jaypee Healthcare is designed to expand the company’s footprint in Delhi – NCR. Jaypee Healthcare owns two running hospitals and thus will add to revenue and profitability of the Group immediately on consummation of the share purchase transaction,” the company said to the bourses as part of its explanation for going ahead with the acquisition.
Fundraise plan
Max Healthcare will also be raising funds by way of short-term loans at the company level up to ₹1,000 crore. It shall also organise loan at Jaypee Healthcare level for the repayment of its short-term debt.
The board has also approved issuance of corporate guarantee to the bank/ financial institution for loan proposed to be extended to Jaypee Healthcare.
Refinancing of the existing debt at Jaypee Healthcare will be an interim arrangement. The short-term financial assistance granted shall be repaid once regular loan is disbursed by bank or financial institutions to Jaypee, post-acquisition by Max.