The short-term bridge financing raised by PCR Investments Ltd, which holds a 19.57% stake in Apollo Hospitals, has a repayment period of 91 days, said a person aware of the development, requesting anonymity. He added that the loan is backed by pledged shares of Apollo Hospitals and personal guarantee of the promoters.
According to a recent credit rating report by Brickworks, PCR Investments has a total debt of ₹689 crore due for redemption this calendar year.
The financing from Credit Suisse will help the promoters meet their debt obligations till the time they close the recently announced sale of their stake in health insurance joint venture, Apollo Munich Health Insurance.
In July, the group announced that Housing Development Finance Corp. Ltd, India’s largest mortgage financier, has agreed to acquire the entire 50.8% stake of Apollo Hospitals Group in the health insurance JV for ₹1,336 crore. Out of the proceeds, around ₹1,036 crore will come to the promoter group, while Apollo Hospitals will receive ₹300 crore.
An Apollo Hospitals spokesperson confirmed the development.
“We expect the insurance liquidity event to be completed by September 2019. The proceeds will be utilized to reduce the debt including this transaction. In addition, we have the ability to restructure/rollover the borrowing as may be required," he said, adding that the group is also looking at strategic options to raise funds for reducing its debt.
“We are also looking at a strategic investment option at the holding company level. In addition, the family holds several assets in the portfolio which are capable of monetisation at a future date and will enable the pledge levels to come down to 20% over a year’s time frame," he added.
When contacted, Credit Suisse declined to comment.
On 20 June, Mint reported that the Apollo Hospitals Group was looking to sell its stake in two more subsidiaries, Apollo Health And Lifestyle Ltd and Apollo Proton Therapy Cancer Centre Pvt. Ltd, to raise up to $200 million.
Apollo Hospitals total debt stood at ₹3,450.29 crore as of 31 March.
Apollo Health and Lifestyle is in the business of providing primary healthcare facilities through a network of owned/franchised clinics across India offering specialist consultations, diagnostics, preventive health checks, telemedicine facilities and a 24-hour pharmacy.
In January this year, Apollo opened the Proton Cancer Therapy Centre, considered South Asia’s first such facility. The 150-bed centre has three proton therapy rooms, an advanced radiation oncology centre, medical oncology and immunotherapy facilities and high-end day care chemotherapy wards.