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Jan 21, 2013, 04.35 PM IST
In an interview to CNBC-TV18, Prathap C Reddy, executive chairman, Apollo Hospitals gave the details of the deal with IBA and why the company is keen on setting up better facilities in India. Reddy also mentions that the deal will not affect the business economic of Apollo Hospitals but rather add value.
The company does not have any financial issues as it can draw another Rs 750 crore of debt without any problem and will also get another Rs 200 crore by disposing off the Apollo Health Street
Prathap C Reddy
Apollo Hospital announced a deal worth Rs 400 crore with Ion Beam Applications (IBA) to bring in the ultimate cure for cancer, a modality not available for more than 3 billion people. In an interview to CNBC-TV18, Prathap C Reddy, executive chairman, Apollo Hospital gave the details of the deal with IBA and why the company is keen on setting up better facilities in India. Reddy also mentions that the deal will not affect the business economics of Apollo Hospitals but rather add value.
Below is an edited transcript of Prathap Reddy's interview on CNBC-TV18
Q: What have you announced today?
A: Today, CEO of IBA, Olivier Legrain flew down for a milestone event to bring the ultimate cure for cancer, a modality, not available for over 3 billion people. There are about 40 odd facilities in the world but most of them are in Europe, US and other parts of the countries but the Sub-Saharan, Indian sub continent, absolutely none for our 3 billion people. So, it is a major step taken by Apollo to bring the care for cancer and is one of the greatest concerns and a big challenge for India as well as other parts of the world where this facility is unavailable.
Q: Could you focus on the economics of the business? What does it mean in terms of the profit and loss (P&L) account and what can it mean to your balance sheet?
A: It is going to cost us around Rs 400 crore and is included in our budget for the next two years. We are putting up 15 hospitals in various stages of completion for approximately Rs 2,000 crore. So our budget is going to increase to Rs 2004 crore, but we have a good debt equity ratio and that will help us with no difficulty in funding this. We are putting 50 percent as our equity, 50 percent debt.
Q: The street is focused on the value unlocking, what is the leverage position and how do you expect to proceed on the value unlocking front?
A: Point five (0.5) is the debt equity ratio. We can comfortably draw another Rs 750 crore of debt without any problem and are also going to get another Rs 200 crore by disposing off the Apollo Health Street. So, finance is not a problem. It is an important tool to make a significant difference. In India we have the total comprehensive healthcare for cancer and this time we completed 500 bone marrow transplant in Chennai alone, one of the major achievements of our cancer specialty.
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