Transaction:
- Max Healthcare entered into a strategic agreement with Lakshdeep Group to acquire 63.65% stake of Jaypee Healthcare at an EV of Rs. 1,660 Crores, amidst insolvency process.
- Under the agreement, it will organise debt for repayment of financial creditors of JHL and also proposes to acquire remaining 36% stake with call and put options.
About Jaypee Healthcare:
- Founded in 2012, Jaypee Hospital at Noida is the flagship hospital of the Jaypee Group designed as a 1200 bedded tertiary care multi-specialty facility, commissioned with 504 beds in the first phase.
- Due to inability in paying off a total debt of INR 1000 Crores, it has been undergoing Corporate Insolvency Resolution Process.
- Back in December 2022, Dalmia Bharat signed a binding framework agreement to acquire clinker, cement, and power plants from Jaiprakash Associates and its subsidiary/associate. However in 2023, the deal fell off as troubled Jaypee group went into corporate insolvency.
About Max Healthcare:
- Founded in 2001, a private hospital chain offering services in various therapeutic areas, operating a homecare business and pathology business under brand names Max@Home and Max Labs respectively.
- It also operates 20 healthcare facilities (4300+ beds), 30+ specialities and 5000+ clinicians across the NCR Delhi, Haryana, Punjab, Uttarakhand, Maharashtra and Uttar Pradesh.
Rationale:
- Max Healthcare’s involvement in the revival plan aims to enhance the operational efficiency of Jaypee Healthcare, providing sustainable healthcare solutions to the region and building confidence among various stakeholders.
- The acquisition will includes two operational hospitals of 500-bed facility in Noida and 200-bed Hospital in Bulandshahr, and one non-operational 100 –bedded hospital in Anoopshahr, built on land parcel of 18 acre, 5.75 acre and 2.35 acre respectively.
- Abhay Soi, MD of Max Healthcare said that they are also committed to serve in NCR region with 46 million people which plays a pivotal role in shaping Indian economy as an economic hub.
- The plan is to potentially expand the flagship Noida facility to 1200 beds over next few years.
- This acquisition will also significantly enhance Max Healthcare network and strengthen its leadership position in NCR region.
- JHL reported revenue of Rs 421 crore and EBITDA of Rs 70 crore for the year 2023-24. However, In April 2023, JHL was assigned a rating of ‘CARE D’ due to the company’s defaults in servicing its debt obligations.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
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