LHC completes Rs 766 cr investment in Max Healthcare

South Africa's Life Healthcare (LHC) has completed investment of Rs 766 crore to up its stake in Max Healthcare, equalising shareholding with Max India.
Max India and LHC have achieved an equal shareholding of 46.41 per cent each in Max Healthcare.
Besides, IFC Washington has expressed intent to subscribe to fresh equity shares in MHC to maintain its equity stake at 7.50 per cent, which will result in an additional cash inflow of Rs 31 crores in MHC.
Post IFC investment, Max India and LHC will each hold 45.97 per cent stake in MHC
LHC has paid Rs 67.5 per share in an all cash transaction which puts the enterprise value of MHC at Rs 3,650 crore and its equity value at Rs 2,884 crore.

"LHC has invested Rs 383 crore directly in MHC by subscribing to fresh equity at Rs 67.50 per share. It has also acquired 13.3 per cent of existing stake in the company from Max India at Rs 67.50 per share for Rs 383 crore, to achieve an equal shareholding as that of its JV partner Max India," Max India said in a statement.

In January 2012, LHC had invested Rs 50.24 per share, translating to Rs 516.5 crore, to acquire 26 per cent stake in MHC.
"The current transaction has led to equalisation of stake of both joint venture partners as envisaged in their original JV agreement," Max India said in a statement.

Post transaction, both JV partners will have equal representation on the MHC Board and the brand name of Max Healthcare will remain unchanged, it added.
"Max India group has a successful history of partnership and as envisaged, Max India and Life Healthcare's joint venture has evolved into a mutually beneficial partnership with a clear meeting of minds on critical decisions," Max India Managing Director and Chairman, Max Healthcare Rahul Khosla said.
LHC's considerable experience in managing a large and widespread network of hospitals will be extremely beneficial for MHC as it prepares itself for the third wave of growth, he added.

Max India has interests in life insurance, healthcare, health insurance. Max Healthcare operates 12 hospitals in North India, with a focus on high end tertiary and quaternary care.
Life Healthcare is the second largest private hospital operators in South Africa. It currently owns and operates 63 facilities with 8322 beds in a comprehensive geographic spread over seven South African provinces and Botswana.
Max India scrip closed at Rs 395.95, down 1.58 per cent, on the BSE.