Max Healthcare rights issue plan shelved post stake sale

New Delhi: Diversified group Max India today said it has shelved a plan to raise funds through a rights issue by its arm Max Healthcare Institute after selling 26 per cent stake in it for Rs 516.5 crore to South Africa's Life Healthcare Group.

Max India Director Corporate Development Mohit Talwar told that prior to the stake sale, Max Healthcare Institute Ltd (MHIL) was mulling a rights issue.

"It won't happen," he said but did not elaborate how much fund the company was planning to mop through the rights issue.

[caption id="attachment_106106" align="alignleft" width="380" caption="Max Healthcare Institute which presently runs six hospitals and two centres, has a capacity of over 930 beds. PTI"][/caption]

Talwar said Max Healthcare will invest the Rs 516.5 crore to be received from South Africa based Life Healthcare Group for expansion and reducing the debt, which is estimated to be about Rs 900 crore.

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"The money will be used for expansion, as we are doubling our bed capacity, and for reducing the debt," he said.

Max Healthcare Institute plans to open four new super speciality hospitals in North India by the end of this year.

Analjit Singh led Max India presently holds 91 per cent stake in Max Healthcare Institute Ltd.

The South African company will invest by subscribing to fresh shares of Max Healthcare, Talwar said, adding that deal is an all cash transaction.

Life Healthcare Group is a leading healthcare service provider in South Africa with a market capitalization of over USD 2 billion. Its network includes 63 hospitals with over 8,000 beds and a 27 per cent market share in healthcare industry in South Africa.

One of the prominent hospital chains in the country, Max Healthcare Institute which presently runs six hospitals and two centres, has a capacity of over 930 beds.

PTI