IHH enters 7.4 billion rupee deal to assume full control of India healthcare chain
Wong Pei Ting
HOSPITAL operator IHH Healthcare, which is dual-listed on both sides of the Causeway, has agreed to buy another 24.5 per cent equity stake in India healthcare chain Ravindranath GE Medical Associates (RGE) for 7.4 billion rupees (S$121 million) in cash.
With the acquisition, IHH’s stake in the company will be bumped up to 98.2 per cent from 73.6 per cent, allowing the Malaysia-registered group to assume full control of RGE’s operations.
Announcing this in a bourse filing on Friday (Aug 25), the group said RGE group has been a “key asset” for IHH since its initial investment in 2015, adding that it has built a strong reputation for providing comprehensive multi-organ transplant services.
The move is IHH’s attempt to strengthen RGE group’s operations and expand its market position, as part of the group’s commitment to the India healthcare sector, it said.
IHH had held its 73.6 per cent stake in RGE through its indirect wholly-owned subsidiary GDPL and Parkway-Healthcare (Mauritius).
The 24.5 per cent stake will be bought over from Dr Ravi Group. Of this stake, 13.18 per cent is directly held by RGE’s namesake doctor Dr Ravindranath Kancherla, 1.51 per cent by his wife Adilakshmi, 1.03 per cent by his daughter Lakshmi Sailaja, and 8.8 per cent by his company Global Hospitals.
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The purchase consideration, the group said, was arrived at on a willing buyer, willing seller basis after taking into account the fair market value of RGE shares.
Apart from the RGE shares acquisition, IHH also made two other ancillary transactions with Dr Ravi Group.
One was to buy a 0.32 per cent equity stake held by Adilakshmi in a direct subsidiary of RGE called Global Clinical Research Services at a cash consideration of about 72,000 rupees.
The other relates to a purchase by RGE of a parcel of land and existing building in Chennai, India, that is used for RGE’s hospital operations for 305.5 million rupees. The land is currently owned by Dr Ravindranath’s daughter-in-law.
IHH, meanwhile, noted that the transactions are not expected to materially change the risk profile of the business of the group, as it is already the majority shareholder of RGE. RGE will continue its current line of business after the transactions complete, it added.
IHH shares closed up 0.6 per cent at S$1.75 on Friday, before the announcement.
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