Apollo Hospitals Enterprise Ltd (AHEL) is expecting its debt component to go up to Rs 2,000 crore after cash accruals by fiscal year 2016, by when it would complete investment of around Rs 2,000 crore in expanding its capacity across the country. The company today announced a contract with Belgium-based Ion Beam Applications S A (IBA), worth around Rs 400 crore, to set up a Proton Therapy Centre for cancer treatment in India.
The company currently has a debt of around Rs 650 crore, which would go up to Rs 2,000 crore after cash accruals when it invest in new facilities by FY16, said a senior official from the company. However, the debt to equity rate, which is at 0.2% at present, is expected to be at 0.6 or 0.7% and would be well within the comfort zone.
It may be noted that the company has a plan to launch 14 more hospitals in next three years, with an investment of around Rs 2,000 crore. While the debt component would be higher than Rs 2,000 crore by FY 16, it is expected to retire part of the debt through various means including the the amount from sales of stake in Apollo Health Street, of around Rs 200 crore.
The hospital chain today announced signing of a contract with IBA, which covers the equipment and services supplied by IBA to help Apollo Hospitals to establish the Apollo Proton Therapy Centre including the long term operation and maintenance. The tie up is for advanced radio therapy technology for treatment of cancer.
Cost was one of the factors restraining from setting up a technology for cancer treatment so far, said said Pratap C Reddy, chairman of Apollo Hospitals Group. "With the help of IBA we are able to bring in the technology to India now. The facility, which has to accomadate huge machines, would be constructed by L&T and we have arrangements with IBA for operation and maintenance for 13 years," he added. He added
Apollo would spend around Rs 300 crore for buying the technology, while the rest of the Rs 100 crore would be spend on various expenses including setting up of a facility for the technology in the premises of its upcoming 200 bed hospital in the Old Mahabalipuram Road, in the outskirts of Chennai. The investment is through internal accruals and long term loans.
The proton therapy, which is expected to arrest cancer cells focusing precisely into the affected area without harming tissues nearby, is useful to treat paediatric patients, and treatment of varieties of cancer of particular nature, like the eye or brain cancer. The company is planning to set up the facility by 2015 and plans are to offer the service for Rs 30 lakh. The facility is expected to breakeven in four to five years, said company officials.
IBA would also provide dosimetry equipment to ensure the safe and fast commissioning of the centre to offer the technology available for the patients. The facility will also have a research and development activity partnering with institutions across the world. The research would focus on reducing the treatment cost, so that more people could afford the improved treatment option, said Reddy.
There are around 30 lakh cancer patients in India and 10 lakh new cases are detected every year, added the hospital management.
