Manipal Health petitions the High Court to prevent Emami from selling its share in AMRI Hospitals.

Manipal Health Enterprises (MHE) asked the Delhi High Court on Tuesday to prevent the Emami Group from selling or transferring its 94% share in the latter’s healthcare firm, AMRI Hospitals, to a third party or changing its management while the arbitration procedures are ongoing.
Manipal Health Enterprises is nearing completion of its $1,700-1,800 crore acquisition of Emami Group’s healthcare division, AMRI Hospitals. According to three top industry officials, the purchase was delayed by more than a year owing to value disputes and certain pending paperwork of AMRI relating to the assets. The executives stated that the transaction is in its last stages of due diligence and that documentation is being completed, with an announcement likely in the coming weeks.
It further requested that the Emami Group complete the proposed Rs 1,800-crore transaction.
The executives stated that more than 90% of the purchase revenues will assist the Emami promoters in repaying the debt they took on for the hospital company as well as the debt that AMRI Hospitals has on its books.
Justice Yashwant Verma directed Kolkata-based AMRI Hospitals and 32 others, including Emami Ltd founder and chairman Emeritus Radheshyam Agarwal, to answer to MHE’s suit and scheduled a hearing on December 7 for further consideration.
While MHE requested that the HC appoint an arbitrator to resolve the issue, AMRI objected, claiming that there is “no agreement” between them.
MHE told the HC that AMRI should be barred from selling, transferring, or establishing third-party rights to its 94% shareholding (6,01,44,288 equity shares and 1000 Compulsory Convertible Debentures) as the subject of the June 3 acquisition agreement.
Emami director Mohan Goenka stated in an analyst call last month that the promoters will lower their commitment after selling some other assets in the next 2-3 quarters. Manipal declined to comment when Emami did not respond to an email. Manipal is advised by Allegro Capital Advisors, while Emami is advised by Avendus Capital.
Respondents in the action include registered stockholders and promoter lenders who inked the agreement.
According to the petition filed on behalf of MHE by counsel Rishi Agarwala, the Emami group “malafidely demanded more money” than what had been agreed upon and was now negotiating with others for the stake sale.
The purchase apparently fell through owing to AMRI’s delayed paperwork linked to the properties, which required approval from the West Bengal government.
Senior counsel Kapil Sibal, representing AMRI, stated that there was no agreement between the parties and that because the contract was contingent on certain conditions, such as approval from the state government, which was not received, the hospital was “not bound” to proceed with the “void” transaction.
He told the judge that nothing would happen until the next hearing date.