(Corrects paragraph seven in Sept. 20 story to show the loss of licence at Max Shalimar Bagh was temporary)
By Patricia Aruo
JOHANNESBURG (Reuters) - South African private hospital group Life Healthcare has said it is not ruling out a return to India after selling the firm’s entire stake in Max Healthcare, in an effort to focus on its operations elsewhere.
The hospital group said on Wednesday it will sell its entire 49.7 percent stake in India’s Max Healthcare to global investment firm KKR & Co. L.P. for 4.3 billion rand ($293 million).
“In the long-term, India is still a very exciting healthcare environment. South Africa is still a strategic focus for us and Europe, given the significant investments we have made there in recent years,” Chief Executive Shrey Viranna told Reuters on Thursday.
“Max was a good investment with a strong management team but it was more about our strategy.”
Max Healthcare has also been grappling with regulatory changes in India over the past year, he said.
Indian authorities proposed capping medical costs at private hospitals in the capital to help millions of people, but the plan would deal a blow to the multi-billion-dollar healthcare sector already grappling with price control policies.
In the six-months to the end of March, Max Healthcare reported a wider loss of 67 million rand compared with a loss of 12 million in 2017, negatively impacted by the increased regulatory environment and the temporary closure of Max Shalimar Bagh hospital over an alleged case of medical negligence.
Following the disposal, Life Healthcare wants to focus its attention on its core operations in South Africa, UK, Poland and Western Europe.
The company, whose local competitors include Netcare and Mediclinic has diversified geographically and has also started offering new services.
In 2016 it entered the diagnostic imaging market through the acquisition of UK-based Alliance Medical Group, which also operates in Ireland, Italy, Spain and Northern Europe.
Viranna said the group will continue to make strategic investments in its existing markets, without giving any details.
“We will absolutely look to invest for growth where it makes good financial sense for us. We will look to invest very selectively in our existing geographies as opposed to adding new ones,” he added.
($1 = 0.7557 pounds)
Editing by James Macharia