New Delhi-based Max India on Monday said that it has completed the process of demerging the hospital business under Max Healthcare and the subsequent merger of Radiant Life Care with it. This composite process of merger and demerger was approved by the National Company Law Tribunal’s (NCLT), the company said in a statement.
It added that the merged entity would emerge as the second largest hospital chain in India in terms of revenue. Abhay Soi, the promoter of Radiant Life Care will be the chairman and managing director of the merged entity called Max Health Institute Ltd (MHIL). KKR will be the co-promoter of MHIL.
Max India shall stand dissolved effective Monday, June 1 and without being wound up and subsequently the equity shares of the MHIL will get listed on both the BSE and NSE. The record date for the demerger has been set as June 15, 2020
This composite scheme was a part of the merger plan of Max Group's hospital business with KKR-backed Radiant Life Care. The same was announced around December 2018. Soi promoted Radiant had acquired a 49.7 per cent stake in Max Healthcare in June 2019 for Rs 2136 crore. The deal was backed by private equity firm KKR.
Following the demerger, Radiant's healthcare assets merged into Max Healthcare with simultaneous merger of residual Max India into Max Healthcare . As a result of this merger, the shareholders of Max India will receive 99 equity shares of the merged entity MHIL of face value Rs 10 each for every 100 equity shares of face value Rs 2 each they hold in Max India. Shareholders of Radiant will receive 9,074 equity shares of face value of Rs 10 each in Max Healthcare for every 10 equity shares of face value of Rs10 each held in Radiant.
The non-healthcare or residual business of Max India will be spun off into Advaita Allied Health Services,which will be renamed as Max India later. All Max India shareholders as on the record date will get shares of Max Healthcare and Advaita Allied Health Services
Commenting on this development, Abhay Soi, Chairman, MHIL said, "MHIL will emerge as the second-largest hospital chain in India with strongly established brand equity....Going forward, we plan to expand our operations by investing in growth and leveraging an asset light operating approach. Since the announcement of this transaction, MHIL over the last few quarters has implemented a robust business improvement plan, the results of which are visible in the financial performance of MHIL. I believe that several synergies will play out over the next 2 to 3 years, which will enable us to realize significant benefits from our coming together.”
Meanwhile, Max Group founder Analjit Singh said that the demerger will enable Max India to focus on high potential category of senior care. "I also wish the Max Healthcare team the best. They have committed sponsors in Radiant-KKR and the combined healthcare assets will provide the scale needed for profitable growth," he added.
Max India shares went up 4.2 per cent on BSE on Monday.