Apollo Hospitals Group has entered into a partnership with Kohlberg Kravis Roberts (KKR), a US private equity company to raise Rs. 550 crore long-term investment aimed at setting new benchmarks in the healthcare.
The partnership involves a Rs. 550 crore long-term investment by KKR, together with its affiliates and select investors, in PCR, the holding company for the Apollo Hospitals Group. The investment is in the form of as a five year callable security that consolidates existing debt at PCR and initiates a partnership in the healthcare sector across the two firms. Apollo Hospitals, will raise Rs. 550 crore from KKR to repay promoters’ debt and build more hospitals.
“This transaction is the culmination of very involved deliberations with the clear intent of working together to create long term value for the group and reflects us partnering with players who have a long term view of the healthcare space,” said Dr Pratap C Reddy, chairman of the Apollo Hospitals Group.
According to Sanjay Nayar, CEO, KKR India, “The company has a series of successful investments in the healthcare sector globally, including Hospital Corporation of America and Alliance Boots. Now this partnership with the Apollo Hospitals Group has been initiated through our alternative credit business in India, and will look to pave the way for a much broader engagement between us as partners.”
The PE fund will subscribe to the convertible debentures issued by Prathap Reddy’s holding company PCR Investments with an option to convert these debentures into equity shares of listed Apollo Hospitals at the end of five years. The promoters also will have the right to buy back these instruments at the end of two years.
The three decade old Apollo Hospitals Group has Asia over 8,420 beds across 51 hospitals, 1,503 pharmacies, 92 primary care and diagnostic clinics, 100 telemedicine units across 10 countries. It also had under its umbrella, health insurance services, Global Projects Consultancy, 15 colleges of Nursing and Hospital Management and a Research Foundation with a focus on global Clinical Trials, epidemiological studies, stem cell & genetic research and the first Proton Therapy Centre across Asia, Africa and Australia.