Apollo Hospitals has announced a group-level partnership with Kohlberg Kravis Roberts (KKR) which involves a Rs 550 crores 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 the American private equity fund KKR to repay promoters’ debt and build more hospitals.
Dr Pratap C Reddy, Chairman of the Apollo Hospitals Group said, “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 our philosophy of partnering with players who have a long term view and deep understanding of the healthcare space.”
Sanjay Nayar, CEO for KKR India said, “KKR has a history of successful investments in the healthcare sector globally, including in market-leading businesses like Hospital Corporation of America and Alliance Boots, and we are very excited with the opportunity to partner with Dr. Reddy and family who have created one of India’s finest healthcare businesses. This partnership that 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.
EH News Bureau
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