Apollo Hospitals gets shareholders’ nod to divest pharma arm

Hyderabad: The restructuring exercise by Apollo Hospitals Enterprise (AHEL) to divest front-end pharmacy business to Apollo Pharmacy (APL) has received approval of shareholders, paving the way for the final nod from the National Company Law Tribunal (NCLT).During November last year, Apollo Hospitals had proposed to divest its front-end pharmacy business in favour of Apollo Pharmacy for a lumpsum cash of Rs 527.8 crore. Subsequently, it had initiated measures to obtain the nod of NCLT for the restructuring.The shareholders of AHEL at an NCLT-convened meeting on October 21 approved the restructuring scheme with a majority vote of 99.99 per cent. Amidst reports that AHEL’s decision to demerge its pharmacy business with a complex structure would hurt the minority shareholders, the stock on Tuesday plunged 6.4 per cent or Rs 97.8 to close at Rs 1,430.85 on BSE. Shobana Kamineni, common director in AHEL told ET Now that the company continues to hold strong governance and that the scheme of restructuring was approved through a transparent manner.AHEL said it believes that “the business of front-end retail pharmacy carried out at standalone pharmacy business segment has matured to a stage that it requires greater business attention and possesses high growth potential, independent of the hospitals business.”In a communique to shareholders, AHEL had said the reorganised structure allows it “to focus on hospitals and healthcare services which are its core business as the risks and rewards associated with each of the aforesaid business verticals are different.”While AHEL plans to utilise the proceeds of divestment towards growth and enhancement of other existing businesses, APL hopes to create value for its shareholders by acquiring ready-to-use assets and reducing time to market. APL currently has 3,428 outlets spread across 400 cities and towns, serving about 300,000 customers daily with an employee strength of over 21,000.AHEL holds 100 per cent stake in Apollo Medicals (AMPL), which in turn holds 100 per cent equity in APL. The shareholding structure of AMPL would undergo changes with the approval of this scheme.Post implementation of the scheme, AHEL’s shareholding in AMPL would be diluted to 25.5 per cent with other investors together holding 74.5 per cent stake. While Jhelum Investments Fund would have 19.9 per cent stake in AMPL, Hemendra Kothari would hold 9.9 per cent and Enam Securities would hold majority stake of 44.7 per cent, according to a shareholders’ agreement entered into with AHEL on November 16 last year.

from Economic Times https://ift.tt/2BQmexX
via IFTTT