Analjit Singh-promoted Max India Limited has roped in Goldman Sachs as a new investor. Goldman will put in Rs 535 crore ($115 million) for a 9.4 per cent stake in the insurance-to-healthcare major.
The investment will be made through compulsorily convertible debentures (CCDs), instruments in which the whole value of investment is converted into equity by a specified period.
The company’s board on Saturday approved the fund raising programme under which the CCDs will be converted into equity after 15 months at a price of Rs 216.75 per share. This will give Goldman Sachs a 9.4 per cent stake in Max India.
Max India has drawn up an investment plan of more than Rs 800 crore over the next two years. The company now has a treasury corpus of Rs 330 crore.
“The company is currently at the point of inflection. We expect the life insurance business to break even in 2011-12 and the healthcare business to become profitable next year,” said Mohit Talwar, director, corporate development of Max India.
The bulk of the fresh investment—Rs 518 crore — will be spent on Max New York Life to improve its solvency margins. Another Rs 150 crore will be used to fund Max Healthcare’s expansion plans, Talwar said.
{{/usCountry}}The bulk of the fresh investment—Rs 518 crore — will be spent on Max New York Life to improve its solvency margins. Another Rs 150 crore will be used to fund Max Healthcare’s expansion plans, Talwar said.
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