Cutting Debts: Apollo Hospitals sells stake worth Rs 720 crore

Apollo promoters' are being guided by the Citigroup and HDFC Bank on the current stake sale. The 5 million shares or 3.6% stake in the company will be sold at a floor price of Rs 1,450 per share.

New Delhi: Healthcare major, Apollo Hospitals Enterprise Ltd (AHEL) has sold around 5 million shares or 3.6 per cent stake via a secondary placement to raise capital of around $101 million (Rs 720 crore). The sales proceeds will be utilized to bring down the Apollo Group's debt and associated pledges.

Presently, a total promoter pledge for the company sums up to 54 per cent. The company intends to reduce pledge holdings further to 20 per cent by December 2019. Bringing down the stake was a commitment the promoters had made to minority shareholders.

"In line with our commitment to bring down debt and associated pledges, the promoter family of Apollo Hospitals, represented by Suneeta Reddy, today divested 3.6 per cent holding in AHEL, through a bulk deal," a statement issued by the promoter family said. Further adding, the promoter family holding in the AHEL now has come down to 30.8 per cent.

"Once these proceeds are applied along with the net proceeds from the Apollo Munich transaction (expected by end October), the pledge position will come down from the current 76 per cent to around 20 per cent," it added.

There will be no further dilution of promoter stake, the statement said.

"We have always maintained that our over-arching priority is to work in the best interest of investors and stakeholders and to maximise value for them. We believe this decisive step in bringing down pledge levels will best serve the interests of all stakeholders," the promoters said.

As per a media report by PTI, the promoter family stays fully committed to the vision of its founder Prathap C Reddy and are fully focused on the growth of the enterprise and its performance, with specific thrust on all three verticals -- healthcare services, standalone pharmacies and retail health, the statement added.

The group has been looking at various opportunities from promoter stake sale, selling of joint ventures, raising funds, acquisitions and like-wise. Prior to this, in 2018 Apollo hospital had decided to divest its front-end pharmacy business to Apollo Pharmacy Ltd (APL) for cash consideration of Rs 527.8 crore. The move was part of a restructuring exercise.

Also Read: Apollo Hospitals pharmacy divest front-end biz, credit neutral

Apollo promoters' are being guided by the Citigroup and HDFC Bank on the current stake sale. The 5 million shares or 3.6% stake in the company will be sold at a floor price of Rs 1,450 per share.

Chennai-based Apollo Hospitals' total debt is noted at Rs 3,450.29 crore as of 31 March.

Apollo Hospital was founded by Dr Prathap C. Reddy in 1983 as the first corporate health care in India. It has other platforms such as Apollo Pharmacy, Apollo White Dental and Ask Apollo.