Vasan Healthcare RP may push for strategic partners

Chennai: Vasan Healthcare’s court-appointed insolvency resolution professional is expected to hammer out a deal with lenders to accommodate a strategic partner to revive the eye-care chain. The company, backed by Sequoia, Westbridge and Singaporebased GIC, spiralled to insolvency after it ran afoul of law enforcement and suffered funding difficulties.

“A meeting between the IRP and the lenders will take place soon and the question of a strategic partner may be taken up, now that the court (Madras High Court) has vacated a stay on the insolvency proceedings,” a person directly aware of the resolution procedure told ET.

The outstanding claims to banks, financial institutions and Asset Reconstruction Company Edelweiss are at ?1,268 crore, according to the company’s list of financial creditors put up on its website. The first meeting of the committee of creditors (CoC) is slated for Thursday.

A division bench of the Madras High Court allowed insolvency resolution for Vasan Healthcare in October, nearly two years after it was stayed by a single judge order over the question of whether insolvency and bankruptcy proceedings can continue in the wake of winding up procedure at the high court. Insolvency resolution professional, V Mahesh, had moved the NCLT based on the high court order, and obtained an order reviving the corporate insolvency resolution process recently.


According to people aware of the operations at Vasan Healthcare, the eye-care chain runs about 110 centres, down from above 190 clinics during its heyday about four years back. All its operational centres are in South India while centres in Mumbai, Delhi and one in Dubai have either been shuttered or turned nonoperational.

It has over 2,500 employees and about 300 doctors on its rolls. More than 60% of the equity shares are held by promoters, while over 500 crore are held as shares by Sequoia, GIC and Westbridge on a preferential basis. AM Arun, founder of Vasan, had capitalised on his experience in the pharmacies business in central Tamil Nadu into an eye-care chain in the early 2000s. The regulatory proceedings against Vasan by the enforcement directorate and the I-T department are still ongoing.

Private equity experts are cautiously optimistic about the prospects of a turnaround. C Venkat Subramanyam, founder-director at Veda Corp, the investment banking firm that advised Dr Agarwal’s Eye Hospital on its Series C funding, said healthcare in general and single-specialty like eye care in particular was quite unlike, say, a textile mill or a steel unit in the sense its value lies not in physical assets but intangibles like brand reputation, clinical excellence and quality of consultants and care. “The markets have moved on to a new market leader creating new benchmarks which makes it a challenge for Vasan to bring some value to the table for a potential acquirer,” said Subramanyam.


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