Shrachi group to sell AMRI Hospital stake to Emami promoters

Key reason for Todis' exit is mounting losses caused by the fire tragedy in 2011 that took 91 lives

The S K Todi-led Shrachi Group is set to sell its 32 per cent stake in AMRI Hospitals to the promoters of  Emami Ltd and has appointed Ernst & Young for the deal.

Sources said the Todis decided to exit the joint venture because of mounting losses after a fire at the hospital in 2011 killed 91 people.

Ravi Todi, the Shrachi director on the AMRI Hospitals board, is likely to resign once the stake sale is finalised. The promoters of Emami Ltd and the Shrachi Group refused to comment on the matter. A source close to the development who did not wish to be named said, “Ernst & Young is the consultant for the transaction and the process has just been initiated so it may take some time. The Shrachi Group has been concerned over mounting losses in the hospital business after the fire tragedy.”

The Emami promoters have about 66 per cent stake in AMRI Hospitals and the West Bengal government holds 1.9 per cent.  The hospital, co-founded by industrialists R S Agarwal and R S Goenka, had booked a profit of around Rs 12 crore on a turnover of Rs 187 crore in 2009-10. It is shut since 2011. The Emami promoters recently met Bengal Chief Minister Mamata Banerjee over reopening the hospital. S K Todi was not present in that meeting.

The Supreme Court in October 2013 ordered AMRI Hospitals to pay Rs 5.96 crore as compensation for medical negligence. With interest, this translates to a little over Rs 11 crore.

The outpatient department of the hospital is functioning. The hospital’s management is expecting the necessary approvals to admit patients within the first week of July.

AMRI Hospitals had planned to set up seven hospitals across the east and north-east for Rs 1,750 crore, which were put on hold after the accident. Plus, it was planning to invest Rs 300 crore to add beds in its existing hospitals.