Max Group, promoted by Analjit Singh, is in talks with South African healthcare major Life Healthcare to dilute its stake in Max Healthcare. Life Healthcare had picked up a 26 per cent stake in Max Healthcare in 2011, for ₹516 crore, at ₹50.24 per share.

After the new deal, the South African firm could own over 40 per cent of the Indian healthcare firm. Under the agreement between the two partners, Life Healthcare can increase its stake to 50 per cent if the company meets certain business targets.

According to investment banking sources, Max and Life Healthcare would end up with an equal stake in the company after the new transaction. Max India currently owns about 66 per cent of the healthcare venture while IFC holds 7.5 per cent.

“The deal could be finalised over the next 4-6 months. Negotiations are at a fairly advanced stage between the two sides. The only thing that could come in the way of the deal is Max Healthcare not meeting targets specified in the 2011 agreement,” one of the sources said.

No comment When contacted, a Max spokesperson said the company does not comment on market speculation. But sources close to the company said that Max was keen to divest the stake to take care of its debt.

Life Healthcare already has two members on Max Healthcare’s board and has been sharing best practices in areas such as nursing & training, IT & Information, and cross-facility systems standardisation.

Life Healthcare is the second largest South African healthcare major and operates over 60 facilities in a comprehensive spread over seven South African provinces and Botswana. Max Healthcare operates 11 hospitals in the Delhi-NCR region and North India with a total capacity of 1,900 beds. It recently started three hospitals in Shalimar Bagh, Delhi; Mohali and Bathinda, Punjab.

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