Analjit Singh, the billionaire promoter of the Max group with business interests in healthcare and insurance, is in talks to refinance debt worth USD 500-600 million at the holding company level, two people aware of the development said. Debt refinancing is a process of reorganizing debt obligations, either by restructuring or replacing it. Refinancing offers company’s benefits such as lower interest payments, favorable loan terms and access to more cash that can be deployed for investments or operations. Singh’s Max Group comprises Max Financial Services Ltd, which includes Max life insurance business; Max India Ltd, which houses the hospitals and health insurance businesses; and Max Ventures & Industries Ltd, which houses the group’s real estate and specialty packaging business.
Singh owns stakes in the three listed companies through Max Ventures Investment Holding Pvt. Ltd, Liquid Investment and Trading Co. Pvt. Ltd and Mohair Investment and Trading Co. Pvt. Ltd. According to data from stock exchanges, Singh and his family members own 30.29 percent, 40.96 percent and 47.21 percent stakes in Max Financial Services, Max India and Max Ventures and Industries, respectively. “They have some debt repayments coming up in the near future and the conversations are happening to refinance that. In all, they are looking to refinance USD 500-600 million of loans that they have at the holding company level. They have reached out to various institutions, private debt funds for this,” said one of the people cited above, requesting anonymity as he is not authorized to speak to reporters. Piramal Finance’s structured credit business is one of the parties that is engaged in talks with the group, he said. “The transaction is at a preliminary stage and Piramal is not the only one that they are talking to. Given the size of the transaction, there will be multiple parties that will get involved,” he said.
A spokesperson for the Max Group declined to comment on the development. A spokesperson for Piramal Group said, “As per our corporate policy, we do not comment on market speculation.” Earlier in 2016, American private equity firm KKR had backed Analjit Singh with a USD 325 million funding for debt restructuring. In May, Mint reported that global private equity firms Blackstone Group LP and Warburg Pincus Llc were in talks to invest in Max Financial Services Ltd for a minority stake. Max Financial Services was looking to raise money to finance a potential acquisition by its life insurance unit Max Life Insurance Co. Ltd. On 10 April, Max Financial had said its board has approved mobilization of funds from KKR Capital Markets India Pvt. Ltd, TPG Global Llc and Standard Chartered Bank to finance an acquisition opportunity by Max Life. In February, Mint reported that Max Life Insurance was in the race to buy out or pick up a majority stake in IDBI Federal Life Insurance Co. Ltd, which was valued at around ₹ 6000 crore.
The Max Group took its present shape in 2015 when the promoters decided to split the single listed group entity Max India Ltd into three separate units—life insurance; health and allied businesses; and manufacturing—in a restructuring exercise aimed at unlocking shareholder value in its key businesses. Max India was renamed Max Financial Services Ltd to focus on the life insurance business. Max Bupa Health Insurance, hospitals business and Antara Senior Living were transferred to Max India Ltd and the specialty packaging business was transferred to Max Ventures and Investments Ltd. – Livemint