The board of Apollo Hospitals Enterprises Ltd decided to raise funds for a planned Rs 900 crore of investments over the next two years by issuing up to 15,44,621 convertible warrants to its promoter, executive chairman Prathap C Reddy. It plans to finance additional working capital requirements as well.
The board also appointed Sindhoori Reddy, daughter of Suneeta Reddy, executive director, finance, and granddaughter of Prathap Reddy, as vice-president, operations.
The Chennai-based hospital chain reported a top line of Rs 1,800 crore and Rs 152 crore of profit in 2009-10.
Each warrant to be issued shall be convertible into one equity share of the company with a nominal value of Rs 10 each, at a price of Rs 771.76, which includes a premium of Rs 761.76 per share.
The price is not less than the price calculated under the regulations for preferential allotment of shares, according to the company’s announcement in the Bombay Stock Exchange.
An amount equivalent to 25 per cent of the total consideration of the warrant was to be paid on the day of allotment of warrant and the rest on the date of allotment of equity shares. The warrants can be converted within 18 months of the issue. The lock-in period will be three years from the date of allotment.
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Suneeta Reddy told Business Standard that the chain would add 1,600 more beds in the next two years Apollo Hospitals, for an investment of Rs 900 crore. The new beds would come in Nashik, Mumbai, Visakhapatnam, Nellore, Karaikudi, Pune and Chennai.
It is also planning a 350-bed hospital at Mumbai and Delhi, with an outlay of Rs 200-250 crore.
Last year, she said, Apollo added 500 beds, of which 250 ar operational; the remaining ones would come into use from this year. Revenue per bed increased by 16 per cent in 2009-10.
“We expect our top line to grow by 25 per cent, once the additional 500-bed expansion plan gets completed. After this, we will go for further expansion,” she added.
Apollo to demerge pharmacy business
Apollo Hospitals has planned to list Apollo Health Street, an end-to-end healthcare outsourcing focused services company, in the next 18 months. It is also planning to bring in a strategic partner for its pharmacy business, said Suneeta Reddy, executive director, finance.
“We are planning to raise around $50 million (Rs 230 crore), which will be used mainly to repay debt, currently around $80 million (Rs 368 crore),” she said.
The group also decided to demerge its pharmacy business. “The proposed demerger will allow the group to bring in a strategic partner for the pharmacy business. In the new joint venture, Apollo Hospitals will hold 51 per cent stake,” said Reddy.