Malvinder Singh and Shivinder Singh, the promoters of Religare Enterprises and Fortis Healthcare, have raised Rs 1,400 crore debt from global banking major Standard Chartered two months ago, said two sources in the know of the development.
The funds raised could be invested in the growth plans for Religare, which has filed for regulatory approval for its Rs 800-crore rights issue, said a source. The funds raised by the Singh brothers was in their personal capacity and not in the name of Religare, he clarified.
The billionaire brothers have mortgaged seven properties with a total space of 1.3 million square feet to raise the funds. The properties include two offices in Vile Parle and Jogeshwari in Mumbai, the Saket office in Delhi that Malvinder bought from Unitech in 2009, two back offices in Noida, group company offices in Ahmedabad and Pune, the source said.
“It was part of their larger corporate strategy. Their businesses are growing at 25 per cent CAGR (compounded annual growth rate). So the idea was to borrow and grow the business further.”A mail sent to Malvinder’s office did not elicit any response. A Standard Chartered spokesperson said: “We wouldn’t comment on market speculations.”
The transaction was done through a structured debt which would give returns of 14 to 16 per cent to Standard Chartered. The debt carries a fixed coupon of around 10 per cent and a buy back option for the borrower — the Singh brothers. The coupon is serviced through current lease of the mortgaged properties and unleased properties will have additional commitment from the borrower to make the remaining part of coupon good.
Religare, a financial services company, has made a series of acquisitions in the asset management and private equity space in the last couple of months. In July, its investment banking arm Religare Capital Markets acquired a majority stake in South African broking firm Noah Financial Innovation. In May, Religare bought 40 per cent stake in Mauritius-based asset management firm Investment Professionals Ltd for an undisclosed amount.
According to reports, Religare was in talks with two foreign insurers for a joint venture to offer general insurance services in India and plans to acquire five to seven boutique asset managers in the United States and Europe in the next 18 to 24 months.
After selling Ranbaxy Laboratories in 2008 for $ 2 billion to Japan’s Daiichi Sankhyo, the Singh brothers have expanded their hospital business under Fortis Healthcare and acquired 23.9 per cent stake in Singapore’s Parkway Holdings. Later, Fortis sold its stake to Malaysian state fund Khazanah Nasional Bhd.
