Chennai bench of National Company Law Tribunal (NCLT) has approved the Rs 520-crore resolution plan by ASG Hospital for the debt-laden Vasan Eye Care, a chain of eye care hospitals across the South.
The resolution plan of Jodhpur-based ASG Hospital was approved by committee of creditors (CoC) with a 97.90% voting share, in February 2022 and had been waiting for NCLT approval.
Vasan Eye Care had over Rs 2,000 crore of outstanding to a slew of creditors and had defaulted on the payments, triggering slapping of corporate insolvency resolution process (CIRP) against the company by the NCLT in 2017.
MGM Healthcare, Maxi Vision Eye Hospital and Dr Agarwal’s Health Care were the other bidders in the fray to acquire Vasan Eye Care.
In a February 3, 2023 order, NCLT detailed that out of the Rs 520 crore, a sum of Rs 394 crore will be paid to various creditors within 30 days from the date of NCLT approval. An amount of Rs126 crore will be infused towards capex and working capital requirements in one year.
For the purpose of payments, a special purpose vehicle (SPV) will be formed and a sum of Rs 385 crore is to be infused into it.
As per the resolution plan, ASG Hospital along with the SPV intends to fund the acquisition from a mix of their internal accruals, existing banking facilities and their anchor investor, Foundation Holding.
Once popular for its eye care network, Vasan Eye Care’s resolution process has been a long- stretched one, with frequent legal interventions and the Covid-induced delays in the proceedings.
In October 2019, a division bench of the Madras High Court allowed insolvency resolution for Vasan Health Care, nearly two years after the proceedings were stayed by a single judge order on whether insolvency and bankruptcy proceedings can continue in the wake of winding up procedure at the High Court.
However, insolvency resolution professional then moved the NCLT based on the HC order, and obtained an order to revive the corporate insolvency resolution process.
ASG Eye Hospital is a chain of over 50 specialty eye hospitals across 16 states in India, Uganda and Nepal.
Foundation Holdings partnered with ASG in 2019 when the group had under 25 hospitals. The company has a presence in Tier 2 and 3 cities and covers north and east India. With the acquisition of Vasan Eye Care, ASG would be getting the much-needed foothold in south India.