India’s Apollo Hospitals family seeks investors, asset sales to cut debt

Bloomberg

The family that controls Apollo Hospitals Enterprise Ltd, India’s largest private hospital chain, is looking to sell assets or bring an outside investor into their holding company to pay down debt.
The aim is to reduce the Apollo shares pledged by the family as collateral to lenders, to 20 percent of their total holding in the company from about 78 percent now, said Suneeta Reddy, Apollo’s managing director and one of the four daughters of founder Prathap Reddy. The Reddy family owns about 34 percent of Apollo’s stock.
“The idea is to do something that’s good for all shareholders of Apollo. If it means reducing our pledge, we are committed to doing that,” she said in an interview with Bloomberg. “We will see what the family can do.”
Shares of the Chennai-based company closed 0.5 percent lower after rising as much as 2.7 percent during trading. The benchmark S&P BSE Sensex advanced 0.2 percent.
In February, Apollo saw its share price plummet as a credit crunch across India’s financial sector spurred fears that
companies whose controlling shareholders had pledged a large proportion of their holdings could be in danger of bulk selling if they defaulted.
Subhash Chandra’s Essel Group and Anil Ambani-controlled firms also faced investor concerns.
Apollo’s stock has recovered since then, gaining nearly 10 percent this year. The Reddy family has sold off its share in a health insurance venture with Munich Re Group that it says will bring its pledged ratio down to between 35 percent and 40 percent by September.
The family has given itself about a year to get the pledge ratio of its Apollo holding down further to 20 percent, Suneeta Reddy said.