Life Healthcare raises R3.7bn through Indian divestment
Private hospital group sells 49.7% stake in Max Healthcare Institute to Radiant Life Care
Private hospital group Life Healthcare says it raised about R3.7bn by selling its investment in India.
The group’s sale of its 49.7% stake in Max Healthcare Institute, to Radiant Life Care, became effective on Friday, it said in a statement on Monday.
Radiant paid 80 rupees ($1.15) per share, which equates to about R3.7bn of net proceeds after costs, hedges and taxes, Life Healthcare said. Profit on disposal amounted to about R900m.
“The company will utilise the funds received to settle debt,” it said.
Life Healthcare said in May it was also reviewing its Polish operations, which have been hurt by steep tariff cuts from that country’s government.
In Poland, Life Healthcare owns the Scanmed hospital group and provides diagnostic services through Alliance Medical.
“It [Scanmed] has had quite an unfortunate time of late,” Life Healthcare CEO Shrey Viranna said at the time.
The Polish business reported a 30% fall in normalised earnings before interest, tax, depreciation and amortisation (ebitda) in the six months to end-March.
Life Healthcare’s half-year group revenue rose 9.5% to R12.4bn, although interim profit after tax fell 46.9% to R498m. Ebitda, which strips out nontrading costs, grew 2.2% to R2.7bn.
Old Mutual Investment analyst Philip Short said Life Healthcare had “a comfortable level of debt in absolute terms” relative to its listed peers.
The company’s net debt-to-ebitda ratio was at 2.2-times, well within its covenant of 3.5-times, Short said.
Prior to the sale of Max Healthcare, Life Healthcare’s net debt-to-ebitda ratio was at 2.8-times.
Life Healthcare’s shares were 1.5% down at R22.26 shortly after noon on Monday.
With Tamar Kahn