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Aster DM Healthcare’s decision to separate its India and Gulf Cooperation Council (GCC) businesses has received a positive nod from the global and domestic proxy advisory firms such as Glass Lewis, IiAS, SES and ISS.
SES said that the transaction is in line with compliance and they do not identify any major concerns regarding the proposed segregation of the India and GCC businesses.
Established by Dr Azad Moopen in 1987 as a single clinic in Dubai, the company has since grown to offer a full spectrum of healthcare services.
Growing network
In India, Aster has a substantial and growing network in five southern States through its 19 hospitals, 13 clinics, 226 pharmacies and 251 patient experience centres.
In the Gulf, it has developed a strong reputation and presence with 15 hospitals, 118 clinics and 276 pharmacies across the UAE, Saudi Arabia, Qatar, Oman, Bahrain and Jordan.
In November, the company announced the separation of the India and GCC businesses to unlock value for the shareholders by allowing both the India and GCC businesses to adopt a market-focused strategy and create sustained long-term growth.
Separation plan
Under the separation plan, a consortium led by Fajr Capital has entered into a definitive agreement to acquire a 65 per cent stake in the ownership of the GCC business, Aster DM Healthcare FZC. The Moopen family will continue to manage and operate the GCC business retaining a 35 per cent stake.
In India business, promoters will retain 42 per cent stake in the company.
As per the SES report, the company explained the rationale behind promoter’s association with the hived-off entity stating that “the Moopen family (promoters) will retain a 35 per cent stake in the GCC business for continued promoter participation in the GCC business.”
Aster has proposed to reward its shareholders through the sale proceeds of the transactions by distributing 70-80 per cent of the proceeds as dividend. The remaining proceeds will be retained as reserves and to pursue growth opportunities.
IiAS said, “The GCC and India businesses have separate business dynamics and separating the two businesses is in the long-term interest of shareholders. Thus, we support the resolution. Further, the company has announced that it proposes to pay out 70-80 per cent of the upfront proceeds ($903 million), to shareholders”.
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