Max India has shelved its plan of raising funds through its right issue. The plan was shelved because it sold its 26% stake in Max Healthcare Institute to South Africa’s Life Healthcare Group for rupees 516.5 crore all in cash transaction. The total amount of right issue was not disclosed by the company.
Max Healthcare Institute will utilise the proceeds of stake sale for reducing its debt as well as for its expansion. The total amount to be spent for this purpose is about 900 Cr. The company is going to double their bed capacity through this expansion. By the end of 2011 the company also have plans to open 4 new super speciality hospitals in northern India. Presently Max India holds 91 per cent stake in Max Healthcare Institute Limited.
South Africa Company Life Healthcare Group will invest its money through subscribing to Max Healthcare fresh issue of shares. All the money amounting to Rs 516.5 Cr for this deal will be paid in cash. Life Healthcare Group is one of the leading healthcare service providers of South Africa. It has a Market Cap of about 2 billion US dollars. The company’s Network comprises of 63 hospitals with more than 8000 beds. In healthcare industry Life Healthcare Group has also more than 27 per cent market share in South Africa.
“Bell the bull says: Max Healthcare Institute has prominent hospital chains in India. Presently they are running 6 hospital and 2 centres with a capacity of 930 plus beds.”