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IHH, Temasek seek control of Medanta; ArcelorMittal to exit Uttam Galva Steels

06 February, 2018

Malaysia’s IHH Healthcare Berhad and Singapore state investment firm Temasek are both eyeing a majority stake in Global Health Pvt. Ltd, the owner and operator of Medanta-The Medicity chain of multi-speciality hospitals, The Times of India reported citing people aware of the development.

The two firms are in separate talks for a deal that may value the Naresh Trehan-founded company at around Rs 5,800 crore.

Trehan’s family and co-founder Sunil Sachdeva together own around 55% stake in the Gurgaon-headquartered Medanta.

IHH Healthcare Berhad, which is majority owned by Malaysian sovereign wealth fund Khazanah Nasional Berhad, is looking to buy shares held by private equity giant Carlyle Group, Temasek and Medanta’s founding partners to acquire a majority stake.

IHH Healthcare wants to become a strategic partner to Trehan, a leading cardiovascular surgeon, who will retain significant minority stake, according to the report.

However, existing investor Temasek is also looking to get a controlling stake. In January 2015, Temasek bought 17.74% stake in Global Health from early investor Punj Lloyd, which made a complete exit.

The report quoted unnamed sources as saying that IHH was actively pursuing a deal with Medanta after its proposed acquisition of Fortis Healthcare suffered setbacks. IHH was earlier said to be in talks to buy a stake in another hospital chain, Max Healthcare.

In a separate report, steel major ArcelorMittal will sell its 29.05% stake in debt-laden Uttam Galva Steels Ltd to the company’s promoters – the Miglani family – through an inter-se transfer of shares expected to take place later this week, The Economic Times reported citing people aware of the development.

Luxembourg-headquartered ArcelorMittal’s stake in the Indian steel company is classified as promoter group holding and Mittal will no longer be a co-promoter once the transfer of shares goes through.
In a stock exchange filing, Uttam Galva said that promoter group entity Sainath Trading Company Ltd would buy shares held by ArcelorMittal on or after February 7.

ArcelorMittal Netherlands had picked up the minority stake in Uttam Galva in 2009.

The development comes amid reports that ArcelorMittal’s role as promoters in Uttam Galva Steels could make them ineligible to bid for assets that are under sale as part of bankruptcy resolution process. As per recent amendments to the Insolvency and Bankruptcy Code, promoters or sister concerns of companies with non-performing assets (NPAs) of more than a year are prohibited from bidding for these companies.

However, ArcelorMittal claims that it is a non-controlling minority shareholder in Uttam Galva and has no representation on the board, according to the report.

Meanwhile, Prem Watsa-led Fairfax Financial Holdings Ltd and private equity firms Warburg Pincus LLC and General Atlantic LLC are reportedly in contention to buy UK-headquartered financial group Legal and General’s 25% stake in IndiaFirst Life Insurance Co. Ltd.

According to a report in Mint, which cited two people aware of the development, insurance firms Ergo International AG (Germany) and Manulife Financial Corporation (Canada) are also in the fray.

Launched in 2010, IndiaFirst Life Insurance is a joint venture between Bank of Baroda (44% stake), Andhra Bank (30%). The company posted net profit of Rs 35.16 crore in the financial year 2016-17.
Ambit Corporate Finance has been given the mandate to find a buyer for Legal & General’s stake, the report added.

Canada-headquartered Fairfax has a 22% stake in another Indian insurance company – ICICI Lombard General Insurance Co. Ltd.

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IHH, Temasek seek control of Medanta; ArcelorMittal to exit Uttam Galva Steels

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