Aster eyes assets in Saudi market

dubai — Aster DM Healthcare is looking at acquisition opportunities in Saudi Arabia, its managing director told Reuters.

This is despite previous delays in payments from the Saudi government, which could have pushed the company to default on a syndicated loan, he said.

Aster, which operates hospitals, clinics and pharmacies in the Gulf and India, is attracted to Saudi Arabia because of the size of the market compared with other Gulf states, and also because of ownership rules, which would let Aster own up to 100 per cent of a business, said Azad Moopen.

“We consider Saudi a good market despite payment difficulties which we had there,” he said.

Aster obtained a $295 million loan from India’s Axis Bank in April. The loan replaced and repaid $155 million of a $295 million facility which the firm raised in 2015. Aster replaced the facility to obtain better terms, such as a longer maturity and looser financial requirements for its debt-to-equity ratio.

The decision to look for better terms was triggered by delays in payments of about $150 million from Saudi Arabia’s ministry of health. “Payments were overdue for nearly one-and-a-half to two years,” said Moopen, and were not made for the whole of 2016.

By early 2017, with $150 million pending, “we were not sure when we were going to get this money, and we didn’t want to default, that’s why we wanted better terms from the banks.”

Aster’s new loan facility is being syndicated by Axis, though no bank has joined the loan yet. It has a 10-year tenor, while the previous facility was for five years.