Religare, Fortis holding firm in talks to refinance $300 million debt
RHC Holding said to be in talks with Nomura Capital and Edelweiss Financial Services to run the loan syndication process
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Mumbai: RHC Holding Pvt. Ltd (RHPL), the holding company for the Religare and Fortis brands, among others, is in talks to refinance $300 million debt, three people aware of the development said. RHPL is a closely held investment company owned by former Ranbaxy Laboratories promoters Malvinder Mohan Singh and Shivinder Mohan Singh.
“The company is currently in talks with Nomura Capital (India) Pvt. Ltd and Edelweiss Financial Services Ltd to run the loan syndication process, but no final decision has been taken yet,” said one of the people cited above, requesting anonymity as the discussions are private. “The company is exploring both domestic and overseas borrowing options,” this person added.
“While we do not wish to comment on conjecture, as part of our business strategy, we constantly evaluate various strategic options including refinancing and raising of funds for prudent capital management of our businesses,” an RHPL spokesperson said.
A Nomura India spokesperson declined to comment, while an email sent to Edelweiss went unanswered.
According to a March report by Icra Ltd, RHPL has invested in both debt and equity in group firms including Fortis Healthcare Ltd, Religare Enterprises Ltd, Religare Aviation Ltd, Religare Wellness Ltd, Dion Global Solutions Ltd, SRL Ltd and Health Fore Technologies Ltd. It has also invested in real estate and extended loans to non-group firms, corporate filings show.
“A large portion of RHPL debt is short-term in nature and the company’s finance costs have risen by close to Rs100 crore in the past one year, from Rs424 crore to Rs522 crore,” said a second person, requesting anonymity. “In the absence of any significant income in the form of dividends from its subsidiary companies, it is highly dependent on refinancing its loans to avoid a potential asset-liability mismatch.”
As of 31 March, RHPL had a total net worth of around Rs6,900 crore and a debt of Rs4,064 crore. The firm’s key source of funds is treasury income, earned from investments and trading in mutual funds and from inter-corporate loans provided to group companies. For 2015-16, the company reported a net profit of Rs73.6 crore, as against Rs91.08 crore in 2014-15.
In April, the International Court of Arbitration in Singapore awarded damages of around Rs3,500 crore to Daiichi Sankyo against the sellers of Ranbaxy, including RHPL, for allegedly concealing facts while selling their 34.82% stake in the drug maker to the Japanese firm for $2.4 billion in 2008. The Singh brothers have appealed against the court’s verdict.
“RHPL has also made investments in real estate and extended loans to non-group companies and has been trying to liquidate its real estate portfolio but given the current slowdown in the real estate market, a complete exit has become difficult,” said the third of the people cited above, declining to be named.
In October 2015, Mint reported that the Singhs were in talks to sell their stake in Religare Enterprises. Last month, The Economic Times reported that the brothers had approached potential buyers to sell Religare Finvest, a subsidiary of Religare Enterprises.