Max India has got the nod from its shareholders allowing the company to sell its 51% stake for Rs 510 crore in Max Bupa Health Insurance Company to private equity firm True North. The corporate made the voting result public on the Bombay Stock Exchange (BSE) Thursday.
Under the special resolution for 'divestment of equity share of Max Bupa Health Insurance Company, a material subsidiary of the company" 94.13% votes were received in favour of the stake sale. The outcome showed that promoters and the promoters group voted 100% in support, while 86.47% of public institution and around 99.84% of public non-institution voted in favour of the special resolution.
The board of Max India had approved the sale of its 51% stake in Max Bupa to True North on February 26. However, the all-cash transaction valued Max Bupa at an enterprise value of Rs 1,001 crore and was subject to requisite regulatory approvals. At the conclusion of the transaction, True North will nominate directors on Max Bupa's board, while Max India's nominated directors will step down, a joint statement by True North and Max India had earlier said.
Bupa, the existing JV partner in Max Bupa, remains committed to the joint venture and will continue to play an active role in the company as before through its board positions and knowledge exchange initiatives.
The use of the Max brand will be phased out over a period of two years and replaced with a suitable name. The Bupa brand name will continue as before, the statement added. "The transaction will lead to a cash inflow of Rs 511 crore for Max India. The company intends to utilise the proceeds to invest in both existing and new business opportunities which are currently under evaluation," the communication said further.
Commenting on the transaction, Analjit Singh, Founder & Chairman, Max Group had said, "We are rebalancing our portfolio of businesses with a much sharper focus on growing shareholder value, and this transaction is a step towards that journey. We are sure that Max Bupa will continue its excellent performance under its new shareholders, ably supported by the founding JV partner Bupa."
Max India is also selling its hospitals business to Radiant Life Care (Radiant).