Apollo Hospitals promoters plan to bring investors in holding co to pare debt

Apollo Hospitals Enterprise promoters - the Reddy family - are looking to sell stake in their holding company to a long-term partner to release their pledged shares as well as pare debt of the healthcare chain. PCR Investments Ltd is the holding company of the group, that includes Apollo Hospitals Enterprise.

The promoters are also considering monetisation of other assets in order to reduce debt. "The family is working on getting a long term equity partner at PCR Investments Ltd and the investment proceeds will be used to reduce debt," Apollo Hospitals Enterprise MD Suneeta Reddy told PTI in an e-mailed response.

She further said,"the family holds assets in the portfolio which are capable of monetisation at a future date and will enable the pledge levels to come down to 20 per cent over a year's time frame". Stating that the current promoter pledge is at 75.90 per cent, Reddy said, "We expect to bring this down to below 20 per cent in the next 12 months with the events planned above".

She also said the current debt of Apollo Hospitals is around Rs 3,200 crore and "we have plan to bring it to Rs 2,500 crore by the end of this financial year". The promoter holding in Apollo Hospitals as on date stands at 34.40 per cent, she added.

As part of plans to monetise assets to pay off debt, in June this year Apollo Hospitals group had sold its stake in Apollo Munich Health Insurance to mortgage major HDFC for Rs 1,336 crore. "We have exited our equity investment in our insurance joint venture. The post-tax receipts of this will be utilised to reduce promoter debt. The transaction is expected to be completed by end of September 2019," Reddy said.

Business momentum on healthcare services, new hospitals in particular, as well as standalone pharmacies continues to be well and the focus in the short-to-medium term is on revenue growth, profitability and cash flows, she said. "This thrust will enable us to improve our operating performance further, and cement a leadership position in several of these new markets," Reddy added.

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