Max Healthcare said it has entered into a strategic agreement with Lakshdeep Group to acquire controlling stake in Jaypee Healthcare which is undergoing Corporate Insolvency Resolution Process (CIRP).
The acquisition is based on an enterprise value of Rs 1,660 crore.
Under the agreement, Max Healthcare will organize debt for repayment of admitted claims of the financial creditors of JHL and proposes to simultaneously acquire 64% stake in the company, with call and put option for the remaining stake.
To fund the acquisition, Max Healthcare may raise short term loan up to ₹1,000 crore from banks and financial institution to refinance the existing debt at JHL as an interim arrangement.
Max said the short term financial assistance granted by the company to JHL shall be repaid once regular loan is disbursed by banks or financial institution to JHL post acquisition.
The proposed acquisition will give Max Healthcare a controlling stake in JHL, which has two operational hospitals 500-beds Jaypee Hospital, Noida and 200-beds Jaypee Hospital Bulandshahr, built on land parcel of 18 acre and 5.75 acre, respectively.
Further JHL also owns a 100-beds hospital spread over 2.35 acres at Anoopshahar, which is currently non-operational. JHL reported revenue of Rs 421 crore and EBITDA of INR 70 crore for the year 2023-24.
This acquisition will significantly enhance Max Healthcare network and strengthen its leadership position in NCR region
The National Company Law Appellate Tribunal (NCLAT), Delhi has approved the settlement agreed to between Lakhsdeep Group and the Committee of Creditors of JHL (CoC) in its order dated September 12, 2024.
JC Flowers ARC, Bank of Baroda, Exim Bank, Punjab National Bank and Asset Reconstruction Company of India (Arcil) are among its lenders, according to a disclosure made by Care Ratings. ET has earlier reported that JHL has total debt (including the interest component) is about ₹1,000 crore.
“Addition of Jaypee Healthcare Ltd. to the network is an important milestone in our journey to build a formidable presence in NCR – a region which is not only home to 46 million people but also plays a pivotal role in shaping the Indian economy as an economic hub,” said Abhay Soi, chairman and managing director, Max Healthcare.
“We remain focused on formulating a comprehensive strategy that addresses the demands of all stakeholders involved while prioritizing the delivery of quality healthcare services in a sustainable manner and potentially expand the flagship Noida facility to 1200 beds over next few years,” Soi said.
Max Healthcare operates 20 healthcare facilities (4,300+ beds) with a significant presence in North India.
Fortis Healthcare, Apollo Hospitals, Medanta and Max Healthcare are among half-a-dozen companies that have shown interest in acquiring Jaypee Healthcare, the last of the Jaiprakash Group’s priced assets to be admitted into bankruptcy.
