Global Hospitals eyes $60-mn investment

Will raise $25 million from IFC; hospital chain plans to increase the number of beds from 1,000 to 1,800 by 2016

City-based Ravindranath GE Medical Associates (RGE), which runs a hospital chain under the name of ‘Global Hospitals’, will raise around $25 million (Rs 140 crore today) from International Finance Corp (IFC), a member of the World Bank Group. A portion of the money will be infused as equity.

Founded in 1998, RGE operates eight hospitals in Chennai, Hyderabad, Bangalore and Mumbai with a total of around 1,000 operational beds. RGE also operates telemedicine centres at seven locations in India.

The company has lined up projects worth around $60 million for the next two years, which will increase the number of operational beds to 1,800, and rationalise RGE’s capital structure by refinancing existing borrowings.

The proposed IFC investment comprises a loan for IFC’s own account and equity in RGE. The proceeds of IFC’s financing will be used to partially fund the expansion project.

K. Ravindranath, the promoter of the company, is a specialist in gastroenterology and laparoscopic surgery and has over three decades of experience in the health care sector. Other significant shareholders are Indivision India Partners, Haranath Policherla and an Indian portfolio management company.

RGE is expected to benefit from IFC's significant knowledge and expertise gained across other markets. This includes advice on operating practices and growth plans, said IFC. The financial institution’s experience and inputs on corporate governance, insurance, and environmental and social practices will be a significant value addition to the company.