MGM Healthcare acquires SevenHills Hospital in Vizag for Rs 171 crore
MGM Healthcare, a multi-specialty quaternary-care group, has acquired the 300-bed SevenHills Hospital in Visakhapatnam for Rs 171 crore. The acquisition was made as part of the corporate insolvency resolution process of SevenHills Hospital.
As per the resolution plan, the successful resolution applicant would bring in Rs 171 crore by way of an unsecured loan in the resulting company — MGM Healthcare Pvt Ltd – which in turn would transfer Rs 153 crore to the creditors. Rest of the Rs 18 crore would be invested in the proposed entity.
Of the Rs 153 crore, Rs 151 crore has been provided for secured financial creditors, whom corporate debtor owed Rs 1,273 crore. Operational creditors receive Rs 1.8 crore against their total admitted claims of Rs 88.6 crore. The resolution plan proposes to make the payments to creditors within 30 days from the approval of the resolution plan.
It is to be noted here that Sevenhills Hospital has two hospitals – one in Visakhapatnam and another 1,500-bed hospital in Mumbai. The present resolution is only for the Visakhapatnam hospital. The resolution plan for the Visakhapatnam hospital was approved by 100% members of the committee of Creditors.
“By joining forces with SevenHills, a respected institution with a deep-rooted legacy in Visakhapatnam, we’re poised to serve patients in Vizag and from the neighbouring states of Telangana, Odisha, and Chhattisgarh,” said Dr Prashanth Rajagopalan, Director, MGM Healthcare.
This acquisition marks the Chennai-based group’s first expansion outside its home city.
Founded in 1988, SevenHills Hospital is one of the oldest multi-speciality hospitals in Visakhapatnam. It entered CIRP proceedings in March 2018, initiated by Axis Bank under the Insolvency and Bankruptcy Code (IBC), and was overseen by the National Company Law Tribunal’s (NCLT) Amaravati bench in Hyderabad.
As per the resolution plan, the Visakhapatnam hospital of SevenHills Hospital will be demerged forming an entity — MGM Healthcare Pvt Ltd. The successful resolution applicant plans to stabilise the cash flow of the hospital through cost control and tight monitoring of operations, refurbishment and revamp of infrastructure and facilities in the hospitals; introduction of new technology and loyalty programme of patients.
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