Apollo Hospitals Enterprise Ltd will buy out partner Imperial Hospital’s stake in a Bangalore hospital-cum-research facility for around Rs 100 crore.
“We have entered into an agreement to buy 100 per cent (stake) of the Bangalore facility, in which we earlier had 51 per cent,” said Suneeta Reddy, joint managing director of Apollo.
According to a company official aware of the development, Apollo has already increased its stake to 90 per cent in the Imperial Hospital and Research Centre, and the acquisition will be completed in three years. In total, Apollo would invest Rs 90-100 crore to complete the deal, said the official, who did not want to be identified.
It may be noted that Apollo had invested around Rs 30 crore five years ago to acquire its 51 per cent stake in the Bangalore project from a group of doctors. At present, the hospital-cum-research centre has 250 beds, which can be expanded to 500 beds.
| ROLE PLAY |
| * AHEL Founder and Executive Chairman Prathap C Reddy to infuse about Rs 116 crore |
| * Sources say he would convert 2.5 per cent of his preferential warrants into 3.27 million shares |
| * At present, Reddy holds 32-33 per cent |
The company was also planning to build two more hospitals in southern India — A 180-bed facility in Jayanagar, Bangalore, and a 45-bed heart centre in Chennai —for which it had got board approval, said Reddy.
“The facilities that we are planning to add in Bangalore will complement our service offerings in that location and further enhance our geographical reach and patient connect in the city,” she said.
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Speaking of Apollo’s expansion plans, Reddy said: “We will add 2,955 beds across 14 hospitals, thereby increasing the number of hospitals in our network to 51, from the current 37. And the number of beds will be increased from 5,888 to 8,800 in fiscal 2015.”
The total investment required for these project are around Rs 1,939 crore of which Apollo Hospitals has to raise around Rs 1,748 crore. The company has already invested Rs 262 crore in these projects and has a current cash balance of Rs 250 crore. The balance requirement of Rs 1,200 crore will be funded through a mix of internal accruals and debt.
The number of operating beds as of March 31 was 5,153. There was a net addition of 386 beds in 2011-12 in Hyderabad, Visakhapatnam and Bhubanes-war. The company also added beds at its joint ventures and subsidiary hospitals at Kolkata, Delhi and Bangalore.
Said K Padmanabhan, group president, Apollo Hospitals: “As far as the overall projects timeline is concerned, we are broadly in line with our plans. We would expect our capital cost overruns to be in excess of Rs 100 crore.”