Seven Hills Hospital sale to UAE billionaire objected by founder Maganti: Report

Mumbai: The Seven Hills Hospital deal is likely to head towards another controversy with reports that its founder, Jitendra Maganti, has filed objections to a proposal of its sale to UAE-based billionaire B R Shetty in the National Company Law Tribunal.

Medical dialogues had earlier reported that Billionaire BR Shetty’s Dubai-based group, NMC Healthcare is apparently won the race of acquiring Seven Hills Hospital. The sole bidder for Seven Hills Hospital, the UAE based firm had received consent from BMC health department after the firm agreed to clear all outstanding dues and reserve 20% beds for needy patients as per the hospital’s commitment made to the BMC.

Also Read: UAE based NMC Healthcare all set to acquire Seven Hills Hospital

The sale was propagated by the lenders of the cash-strapped hospital which has loans to the tune of Rs 1300 crore

Also Read: Bank of America Merrill Lynch, JM buy 77 per cent of Seven Hills debt: Report

The hospital was founded by Jitendra Maganti in 1980s. In 1986 it set up a property in Vishakapatnam and in 2010 another in Mumbai. However, soon after opening up, the Mumbai based hospital was muddled up in a prolonged legal dispute with Brihanmumbai Municipal Corporation (BMC).

The dispute emerged due to the firm’s failure in fulfilling its commitments made to BMC. BMC had granted land on a 30-year lease to construct the hospital on conditions that the hospital would reserve 20% of its beds for free treatment of needy patients. Subsequently, BMC has made claims of over Rs 150 crore on the hospital. The bid by the BRS Group will include the money that has to be paid to BMC.

The hospital saw days from bad to worst with increasing debts and was finally declared bankrupt by the Hyderabad Bench of the National Company Law Tribunal. Seven Hills Hospital was referred to the bankruptcy court originally by Axis Bank which had an exposure of Rs 770 crore to the hospital. Defaulter on bank loans worth Rs 1300 crore, non-payment of Rs 9 crore property tax and Rs 1137 crore debt as per the former health committee chairperson, an insolvency process was started against the hospital management.

The lenders invited applications and initiated the insolvency proceedings against the hospital. In August 2018, lenders had voted in favour of Rs 950-crore bid from Shetty who has a large interest in the healthcare industry. The bid represents nearly 75% of the Rs 1,270 crore dues claimed by lenders.

However, the deal is likely to now run an issue as the original founder is reported to have approached the NCLT against the deal. Maganti is understood to have filed the objection several months ago, reports TOI.