The biggest hospital in Delhi, Max Healthcare Institute, and the Lakshdeep Group signed a strategic partnership deal on Friday. The goal of the arrangement is for Max to purchase a 64% interest in Jaypee Healthcare (JHL), which is now going through the Corporate Insolvency Resolution Process (CIRP). The enterprise value of Rs 1,660 crore is the basis for the transaction.
According to the agreement, Max Healthcare will arrange debt for the payment of acknowledged claims made by Jaypee Healthcare's creditors. In addition, the company plans to concurrently purchase a 64% share in the business, with call and put options for the remaining 44%, according to a regulatory filing.
For the fiscal year 2023–2024, JHL recorded revenue of Rs 421 crore and EBITDA of Rs 70 crore. JHL is projected to have about Rs 1,000 crore in total debt (interest included). Max Healthcare plans to refinance the current debt at JHL as a temporary arrangement in order to seek short-term loans from banks and financial institutions up to Rs 1,000 crore in order to fund the purchase.
In a ruling dated September 12, 2024, the National Company Law Appellate Tribunal (NCLAT) confirmed the settlement that the Lakshdeep Group and the Committee of Creditors (CoC) of JHL had agreed upon.
The business stated in an official statement that "the transaction, which includes a strategic collaboration agreement and the acquisition of JHL's stake held by financial creditors, shall be consummated in the next 30 days in line with the revival plan approved by the NCLAT."
In response to the acquisition, Abhay Soi, chairman and managing director of Max Healthcare Institute, stated that JHL's entry into the network marks a significant turning point in their efforts to establish a strong presence in the National Capital Region (NCR), home to 46 million people and a key player in the development of the Indian economy as a hub. As to the company's last investment presentation, Max Healthcare has been expanding rapidly to accommodate an additional 3,500 beds within the next four years.
Max will have a stronger presence in North India thanks to the planned acquisition, as JHL already owns three hospitals in Uttar Pradesh, including two that are open and operating in Noida and Bulandshahr. The Bulandshahr facility has 200 operational beds, while the Noida facility has 500 beds, of which 376 are now in use. The third facility, which has a 100-bed capacity and is situated in Anoopshahar, is not in use. Currently, more than 4,300 beds are in use nationwide for Max Healthcare. According to someone with knowledge of the deal, "the acquisition will immediately add about 576 beds to Max's network, with plans for further expansion."
"We stay focused on developing a comprehensive strategy that meets the demands of all stakeholders involved while prioritizing the delivery of quality healthcare services in a sustainable manner and potentially expanding the flagship Noida facility to 1,200 beds over the next few years," Soi stated in response to questions about the expansion plans.
Industry insiders claim that Max Healthcare, Apollo Hospitals, Fortis Healthcare, and Medanta were among the minimum of six firms that expressed interest in purchasing JHL. On Friday, the share price of Max Healthcare fell by 0.57% to Rs 907.4 on the BSE.
