Aster divests Gulf business for $1 bn

Fajr Cap consortium to hold 65%, Moopen 35% in Gulf entity

- Ranjani Raghavan

Leading hospital chain Aster DM Healthcare Ltd on Tuesday said it will separate its mainstay Gulf business and sell it to its Indian promoters (Moopen family) and a Dubai consortium for $1.001 billion, in a move it said will unlock shareholder value and attract more institutional investors.

A consortium led by United Arab Emirates (UAE) government-backed Fajr Capital will own 65% of the Gulf entity, while Azad Moopen, the promoter of Aster, will own 35%, once the transaction is concluded.

Aster’s business in the GCC (Gulf Cooperation Council) countries is housed under Alpha GCC Holdings Ltd, a wholly owned material subsidiary of Aster DM Healthcare.

The current market cap of the combined India and GCC business stands at $2 billion. The transaction values the GCC business at an enterprise value of $1.7 billion ( ₹13,540 crore) and an equity value of $1.001 billion ( ₹8,215 crore), the company said. The deal will help erase the Gulf company’s debt.

Of the $1.001 billion, $903 million will be paid to Aster DM Healthcare. The bulk of the proceeds will be issued as dividends to Aster DM Healthcare investors, the company said, subject to board approval. The rest will be paid out subsequent to certain ‘contingent events’, including an earnout of up to $70 million based on Ebitda (earnings before interest, taxes, depreciation, and amortization) achieved by the GCC business in FY24, the company said.

The Gulf business generates 70% of Aster’s revenues, but it was a drag on the India business because of lower margins, founder Azad Moopen said in an interview.

“The India market was not giving the value for the GCC business," Moopen said.