Apollo Hospitals sells Sri Lanka unit for Rs 72.8 cr
Apollo Hospitals will sell its 33.22% stake in Apollo Hospitals, Colombo, to Sri Lanka Insurance Corporation (SLIC) for a consideration of Rs 72.84 crore (Sri Lankan Rs 145.7 crore). The 5.2 crore shares were sold for Rs 14 a share.
The group decided to exit its operations in Sri Lanka after failing to stave off a hostile take-over bid by SLIC. Apollo accepted the mandatory offer made by SLIC to buy each share at Rs 28 after the latter raised its stake from 19.86% to 36.07% recently, Apollo said in a statement.
“With only a minority share holding, it would have been difficult for Apollo Hospitals to operate effectively. And fortunately, Apollo has found that the offer made by SLIC is adequate and good enough to accept,” the company statement quoted Apollo Hospitals Enterprise’s executive director of finance, Suneeta Reddy, as saying. Apollo said it shall look at other countries for its organic and inorganic growth plans in the future.
Two other minority shareholders of Apollo, Sino-Lanka which had 3% and R Navaratnam, a key promoter of Apollo in Sri Lanka, who had 5% also sold out to the Insurance company owned by local businessman Harry Jayawardena, said agency reports.
SLIC with 36.1 % was the largest shareholder, followed by the Apollo Group with 32 %. The other key shareholders are the Bank of Ceylon, Sino Lanka and R Navaratne who each hold between 3-13 %. SLIC made the offer to buyout the remaining 63.9% shares to keep in line with Sri Lanka’s securities law, which mandates a shareholder owning 30 % or more to make a mandatory offer to the other share holders.
Agency reports said the Indian parent was engaged in a bitter row recently to retain its ownership. The Board of Investments (BOI), the main foreign investment regulator in the island had sided with Lanka Hospitals Ltd saying that they would lose tax breaks if the owning structure of the 350-bed hospital is changed.
However, the local buyers won assurances through the stock exchange that the concessions were to the company and not to private individuals, said overseas reports.
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