Group puts most hospital projects into cold storage
KOCHI: Aster DM Healthcare with an asset base of Rs12,438 crore and operations spread across seven countries said it is keen to buy selected assets of the battered UAE-headquartered NMC Group whose $6.6 billion debt pile has given sleepless nights to scores of banks, mostly based in the UAE.
Aster DM Group has decided to keep most of its on-going projects on hold, as part of its decision to keep the capital expenditure (Capex) under check at least until the third quarter, by which time the market is expected to wriggle out of the grips of COVID 19.
Dr Azad Moopen, the chairman and managing director (CMD) of Aster DM Group, made it amply clear that the group that has built a strong presence in India’s fast growing healthcare market, is nowhere in the race to buy the NMC Group or even a large vertical of the group.
He said operationally, NMC Group is doing OK with all its hospitals and clinics functioning normally. “We are interested in buying selected assets that could add to our group’s synergy, when they are available,” Dr Moopen said while responding to a query from an analyst.
Having said that, he said Aster Group would also be keen to get from the NMC hospital chain senior professionals including doctors, who are willing to shift. “If this works out well, it could improve our manpower efficiency,” Dr Moopen added.
The group though was too keen to pare the debt by selling some idle land in India, the COVID outbreak threw a spanner in the works. But the finance head of the grouo said the company would still strive to bring down the debt to 2 times of EBITDA in the short term itself.
The group is busy drawing up plans to cut down expenses as a strategy to equip the group itself to face the adversities meted out by the COVID outbreak.
The Aster’s top financial executive said the group has decided to put some hospital projects in cold storage or even go to the extent of terminating a few if the COVID pall persists long.
The projects-in-pipeline that may be put on hold include the 65-bed Aster project in International City, Dubai, the 145-bed project in Muscat, the expansion project for Sanad Hospital in Riyad, the 500-bed hospital project on Chennai, another big project in Bangalore, etc.
However, Dr Moopen said the Sharjah hospital project, the first phase of Whitefield (Bangalore) project and the hospital expansion project in Kolhapur (Maharashtra) will go ahead as scheduled as they are in advanced stage of completion.
The Group is close to achieving the 100 per cent legal ownership in Dubai. “We would have concluded the process in March itself if not for COVID, but still we are hopeful that by second half of the current year, we will achieve it,” Dr Moopen said. .
There was a hint that a section of the employees may face the axe in order to help the group stay afloat without much damage. The CMD said human resources (HR) is one key area where the group looks up to save cost substantially. The group may embrace technology and shared services in place of in-house workforce, at least for some time.