The 300-bed SevenHills Hospital in Visakhapatnam has been purchased by MGM Healthcare, a well-known multispecialty quaternary care company, for a sum of Rs 171 crore. This purchase is a component of SevenHills Hospital’s corporate bankruptcy resolution procedure. The hospital has been having financial issues.
The resolution plan stated that MGM Healthcare, the successful resolution applicant, would provide an unsecured loan of Rs. 171 crore to the new business, MGM Healthcare Pvt Ltd. Of this sum, the creditors will receive Rs 153 crore, and the remaining Rs 18 crore would be invested in the newly established company.
The secured financial creditors, to whom the corporate debtor owes Rs 1,273 crore, received Rs 151 crore of the Rs 153 crore set aside for creditors. Operational creditors’ total accepted claims of Rs 88.6 crore would be settled for Rs 1.8 crore in the interim. According to the terms of the resolution plan, these payments to creditors must be made within 30 days of the plan’s acceptance.Notably, SevenHills facility runs two locations: a 1,500-bed facility in Mumbai and one in Visakhapatnam. On the other hand, the present resolution strategy is limited to the hospital in Visakhapatnam. The committee of creditors gave its unanimous support to the plan for this facility.
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 neighboring states of Telangana, Odisha, and Chhattisgarh,” said Dr. Prashanth Rajagopalan, Director of MGM Healthcare, expressing excitement about the acquisition. With this transaction, MGM Healthcare has officially entered a new market outside of its hometown of Chennai.
Among Visakhapatnam’s earliest multispecialty hospitals, SevenHills Hospital was founded in 1988. The hospital joined the Corporate Insolvency Resolution Process (CIRP) in March 2018, which was started by Axis Bank in accordance with the Insolvency and Bankruptcy Code (IBC) and is being supervised by the Hyderabad-based Amaravati bench of the National Company Law Tribunal (NCLT).
The resolution plan calls for the demerged SevenHills Hospital in Visakhapatnam to become MGM Healthcare Pvt Ltd. MGM Healthcare, the successful resolution applicant, plans to use strict cost management and operational monitoring to maintain the hospital’s cash flow. Plans also call for the installation of new technology, a patient loyalty program, and the renovation and redesign of structures and infrastructure.
MGM Healthcare has reached a major milestone with this acquisition, which broadens its reach beyond Chennai. MGM Healthcare wants to revitalize SevenHills Hospital in Visakhapatnam by utilizing its resources and skills, guaranteeing that the area would receive top-notch medical care. MGM Healthcare’s dedication to improving healthcare accessibility and quality in India is further evidenced by this strategic expansion.
SOURCE:
INSOLVENCY TRACKER
