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Home » My Kolkata » News » Temasek funds for Medica, Manipal set to buy AMRI in boost to Kolkata hospitals

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Temasek funds for Medica, Manipal set to buy AMRI in boost to Kolkata hospitals

The interest shown by investors in Kolkata’s private healthcare sector follows apprehensions that hospitals in the city might not be viable

Sanjay Mandal | Published 08.03.22, 06:17 AM
Representational image.

Representational image.

Shutterstock

One big private hospital group has got a new investor, while a healthcare chain in the city is set to get a new owner.

Temasek, a Singapore-based investment firm, has invested around Rs 600 crore in Medica Superspecialty Hospital.

Manipal Health Enterprises is set to buy the three hospitals of the AMRI chain, owned by the Emami group, in Kolkata. The deal includes AMRI's hospital in Bhubaneswar as well, said sources.

The interest shown by investors in Kolkata’s private healthcare sector follows apprehensions that hospitals in the city might not be viable after the state government had set up a regulatory commission in 2017 and proposed capping of rates for many treatments.

The government has not enforced the capping because the private hospitals opposed it.

The CEO of a private hospital said Swasthya Sathi, an insurance scheme launched by the state government, was unviable.

“The Swasthya Sathi rates are unviable and on many occasions, the hospitals are forced to take patients under the scheme. Also, the regulatory commission issues advisories on capping rates of medicines and diagnostic tests,” he said.

“Despite these, the healthcare sector in Bengal is still underserved and there is a huge mismatch between demand and supply. That is luring investors again after the Covid pandemic.” Alok Roy, chairman of Medica Superspecialty Hospital, said the fresh investment of Rs 600 crore would help the group expand further.

Temasek replaces the earlier investors in Medica, a consortium led by Asian private equity investor Quadria and Europe-based co-investors DEG and Swedfund.

According to sources, the consortium held around 67 per cent stake in Medica. They said Temasek’s holding is more than that.

“The deal was stalled by the Covid pandemic. It was finalised late last year,” said Roy. “We’ll focus on expansion and acquiring new hospitals, along with adding more facilities at our hospitals in Kolkata, Ranchi and Siliguri.”

The Emami group, promoters of AMRI Hospitals, are close to finalising a deal of around Rs 1,800 crore with Manipal Health Enterprises for the 1,150 beds in its four hospitals, sources close to the Emami group said.

The deal, the sources said, was expected to be closed “in a couple of months”.

The group will keep a dental care and diagnostic centre in the city, said the sources. They said the promoters of AMRI had recently met chief minister Mamata Banerjee at Nabanna to update her about the development.

The state government has about 2 per cent stake in AMRI’s Dhakuria unit in south Kolkata. The government reduced its stake from 26 per cent to 2 per cent after the 2011 fire in the Dhakuria hospital, which killed more than 90 people, the sources said.

“There are a few other formalities left, after which the deal will be signed,” said a source. These include getting a few clearances.

“The negotiations had slowed down because of the Covid pandemic,” the source said.

According to the sources, huge debts were forcing the AMRI promoters to exit the healthcare business.

“The promoters had to take huge loans to revive the hospital chain after the fire. The hospitals are now doing well but the debt burden is still very high. A major part of the amount Manipal Health Enterprises will pay will go towards paying off the debt,” said a source close to the Emami group.

The Dhakuria unit had to be revamped and the Annexe I building of the unit, which had caught fire, had to be kept closed till last year. It was reopened during the Covid pandemic.

Several big healthcare groups had shown interest in the takeover but backed out because of the high prices, said sources.

Last updated on 08.03.22, 01:31 PM
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