Max India has received shareholders’ approval to sell its 51% stake in Max Bupa Health Insurance Company to private equity firm True North. The company on Thursday made the voting result public on the BSE.
The special resolution for ‘divestment of equity shares of Max Bupa Health Insurance Company, a material subsidiary of the company”, obtained 94.13% votes in favour. The results showed that promoters and the promoters group had voted 100% in favour, while 86.47% of public institution had voted in favour of the special resolution. Around 99.84% of public-non institution also voted in favour of the special resolution.
On February 26, the board of Max India approved the sale of its 51% stake in Max Bupa to True North. Max India is selling its health insurance business to True North and the hospitals business to Radiant Life Care (Radiant).
However, proxy advisors firm had some concerns about the deal. “The insurance and hospitals business accounts for approximately 94.27% of Max India’s sales. The nub here too is not what happens to the residual company after a substantial portion of the business is sold. While shareholders get shares in the Max-Radiant business, the questions is what happens with the cash received,” IiAS said in its report on April 1, 2019.
However, Max India in its press release on April 29 said the first entity, created from a merger of Max Healthcare with the KKR-backed hospital operator Radiant Life Care, will be automatically listed on the Indian stock exchanges. Max India’s other demerged entity, which has currently been named as Advaita, will own the group’s senior living business – Antara Senior Living. It will also manage a corpus of over `500 crore received from the divestment of Max Bupa.
“Max Group’s sponsor Analjit Singh, who has increased his involvement in Max India by taking on the mantle of chairman, is looking to start afresh in Advaita by venturing into 1-2 new business areas, which will have adjacencies to the group’s latest focus areas of life insurance, real estate, senior care and lifestyle. Besides being utilised for seeding new businesses, Advaita proposes to utilise its cash reserves to also offer an exit opportunity through a capital reduction process, subject to regulatory approvals, to shareholders who may not be keen on investing in unchartered areas. This will allow such shareholders access to proportionate proceeds from Max Bupa divestment and encash their shareholding,” the release said. On Thursday, shares of Max India closed at Rs 63.25, down 2.32%, on the BSE. – Financial Express