Reliance and Jupiter Hospital Compete to Acquire SevenHills Healthcare

A competitive bid is underway for the acquisition of SevenHills Healthcare, an unlisted company that operates a prominent hospital in Mumbai. Both Jupiter Hospital and a Reliance Industries-backed firm, NK Holdings, have expressed interest in taking control of the healthcare facility, which boasts 1,500 beds. The hospital has faced ongoing legal challenges with the Municipal Corporation of Greater Mumbai (MCGM) regarding land compensation issues.

According to sources familiar with the situation, both bidders have proposed offers in the vicinity of ₹450 crore, though their payment structures differ significantly. Jupiter Hospital has committed to an upfront payment of the full amount within 30 days of receiving approval from the bankruptcy court. In contrast, NK Holdings has suggested a five-year payment plan for the same sum.

The insolvency proceedings concerning SevenHills were initiated in March 2018 when the company was admitted to the National Company Law Tribunal (NCLT). Since then, the case has been mired in complications and disputes. In July 2024, the NCLT approved a separate acquisition plan for a hospital in Visakhapatnam, allowing creditors to focus on selling the Mumbai facility independently.

Compounding the situation, MCGM has lodged a claim for ₹140.8 crore in unpaid rent for the land on which the Mumbai hospital is situated. This claim is pending admission by the resolution professional overseeing the case. The resolution professional has not provided an updated list of claims to the Insolvency and Bankruptcy Board of India (IBBI), raising concerns among creditors.

SevenHills Healthcare previously owned two hospitals, one in Mumbai and another in Visakhapatnam. Following the onset of the COVID-19 pandemic, the Mumbai hospital was designated as a facility for COVID-19 patients under the Disaster Management Act. This designation further complicated negotiations and the resolution process.

The history of failed resolution plans adds complexity to the current bidding process. In July 2019, the NCLT approved a resolution plan worth ₹1,000 crore by Dr. Shetty’s New Medical Centre (NMC), which was later challenged by MCGM. Although the tribunal initially rejected MCGM’s petition, a Supreme Court ruling in November 2019 overturned those decisions, leaving lenders frustrated by MCGM’s shifting positions.

Post-pandemic, the resolution professional re-opened the bidding process in 2023, attracting interest from various hospital chains, including Max Healthcare, KIMS Hospital, and Virinchi Hospital. Despite the renewed interest, the outstanding claims against the Mumbai hospital remain unclear, as the resolution professional has not updated the creditor list since the sale of the Visakhapatnam facility.

As of March 31, 2023, the total admitted claims for both hospitals amounted to ₹1,361 crore, with financial creditors holding ₹1,273 crore of this debt. JM Financial ARC is recognized as the largest debtholder, owning over 75% of the total claims. The outcome of this bidding process will significantly impact the future of SevenHills Healthcare and its stakeholders.