Aster’s India and GCC business separation and proposed investment by Fajr Capital-led consortium nearing completion [Business]

·         In November 2023, Aster DM Healthcare Limited announced its plan to sell the shares held by Affinity Holdings Pvt Ltd (“Company”), a wholly owned subsidiary of the Company in Aster DM Healthcare FZC to Alpha GCC Holdings Limited (“Transaction”).

·         The plan essentially was to separate Aster’s India and GCC businesses to unlock long-term value, with a Fajr Capital-led consortium to acquire a 65% stake in the Company’s GCC business. The separation plan is now nearing completion, with key regulatory approvals (including approval from Saudi Arabia’s General Authority for Competition) obtained and transaction milestones achieved.

·         Conditions Precedent outlined in the Sale and Purchase Agreement (SPA) are now complete

·         The Company’s business operations in Qatar have been brought under Aster DM Healthcare FZC

Aster DM Healthcare Limited (“Company”),one of the largest and fastest growing integrated healthcare providers in GCC and India, has today announced that the separation of its India and GCC businesses and the proposed investment in the Company’s GCC business by a consortium of investors led by Fajr Capital, a sovereign-owned private equity firm headquartered in the UAE, is nearing imminent completion.

In November 2023, corporate approvals were received to separate the Company’s India and GCC businesses into two distinct and standalone entities to unlock long-term value. Under the separation plan, a Fajr Capital-led consortium entered into a definitive agreement to acquire a 65% stake in the Company’s GCC business. The plan was approved by theCompany’s shareholders in January 2024.

As a part of the completion process, the Fajr Capital-led consortiumhas obtained the necessary approvals from the Kingdom of Saudi Arabia’s General Authority for Competition (GAC).All conditions precedent outlined in the SPA are now complete. No-objection certificates as required from key partnersand have been received andlocal and regulatory authorities in GCC have been informed as necessaryabout the separation of the businesses andthe imminent completion ofthe Transaction. The integration of business operations in Qatar into the Transaction perimeter of Aster DM Healthcare FZC has also been successfully completed.

The Moopen family will continue to lead and operate the GCC business retaining a 35% stake in the buyer entity.Existing shareholders will continue toremain with the listed Indian entity, Aster DM Healthcare Ltd. Upon successful completion of the Transaction, the company intends to declare a substantial portion of the proceeds as dividends to its shareholders, subject to approvals required under law.

In India, the Promoters plan to continue to hold their existing stake in the Company and the separation would provide an opportunity for the Company to expand its institutional investor base. The Company plans to add 1500 beds by FY27 and aims to be among the top 3 hospital chains in India. The expansion plan will encompass a mix of brownfield and greenfield projects, contributing to the company's growth strategy. The Company has planned an outlay of Rs. 850-900 crore which will ensure robust financial support for driving the expansion. This expansion will encompass the upcoming Aster Capital in Trivandrum, featuring 350-plus beds in the first phase by FY26, and Aster MIMS Kasargod with 200-plus beds. Then the Company will be looking at adding bed capacity to the existing hospitals in Medcity, MIMS Kannur by about 100 beds each and Aster Whitefield with 159 beds.

Dr. Azad Moopen, Founder Chairman, Aster DM Healthcare said, “The separation of Aster’s India and GCC businesses will unlock the value and potential of both businesses and provide the needed impetus for the company to further strengthen its presence in both geographies. We are very near to closure and excited to embark on the next stage of growth.”

Commenting on this Alisha Moopen, Managing Director and Group CEO, Aster GCC business said, “With most of the processes near closure and necessary approvals in place, we are almost at the closure of the transaction and ready to embark on the next stage of our growth journey which would see us expand our presence in Saudi Arabia and further strengthen our footprint in UAE, Oman and Qatar. We are delighted to have Fajr Capital and its consortium partners in our journey and thankful to the authorities for their continued support.”

In GCC, the company has plans to expand its Aster Pharmacy business in the Kingdom of Saudi Arabia with 180 retail stores set to open within the next 3-5 years. This would be alongside the expansion of Aster Sanad Hospital in Riyadh with added bed-capacity to serve a larger population segment. In UAE, the company is all set to launch Medcare Royal Hospital, a 126-bed super specialty hospital in Al Qusais, positioned to emerge as the destination for tertiary and quaternary care in a luxury setting, for local and international patients.