India's largest hospital chain, Apollo Hospitals Enterprise Ltd, is eyeing a stake in unlisted Wockhardt Hospitals Ltd, a senior company official said on Tuesday.
Wockhardt Hospitals, promoted by the founders of drug maker Wockhardt Ltd, has been trying to raise money through an equity sale since its initial public offer was withdrawn last year on poor investor response.
“Currently, we are just examining the books, and we are looking at the hospitals, their performance and complete valuation and diligence exercise,” Suneeta Reddy, Apollo's executive director-finance, told news channel NDTV Profit.
“It makes sense for us to have a majority stake so that we can really leverage our intellectual property into that business.”
Reddy said Apollo could have about 10 billion rupees at hand to invest in Wockhardt, about 4 billion rupees of which was from a fund raising in 2007 and the rest through a mix of internal accruals and promoter's capital.
“Wockhardt is a good asset but we have a criteria, which is return on capital employed,” Reddy told the channel.
In an interview with Reuters earlier this month, Chairman Habil Khorakiwala had said he hopes to sell a minority stake in Wockhardt Hospitals in four of five weeks.
The Economic Times had reported last month Fortis Healthcare Ltd has struck a broad agreement to buy up to 74 percent in Wockhardt Hospitals for about 7.5 billion rupees.
Wockhardt Hospitals had sought to divest 24 percent stake to raise about 8 billion rupees through an initial public offer last February.
Source: Reuters