Reliance-backed Firm & Jupiter Hospital Eyes Acquisition of Legally Troubled SevenHills

Reliance Industries-backed NK Holdings and Mumbai-based Jupiter Hospital have emerged as key contenders to acquire SevenHills Healthcare, an unlisted company that runs a large hospital in Mumbai and has been stuck in a long-running legal and insolvency battle.

SevenHills operates a 1,500-bed facility built on land owned by the Municipal Corporation of Greater Mumbai (MCGM). The hospital has been under insolvency proceedings since March 2018, largely due to disputes with the civic body over unpaid rent and compensation for the land it is built on.

According to The Economic Times, NK Holdings has submitted a resolution plan for the company, joining Jupiter Hospital in the race.

While both bidders have valued SevenHills at around ₹450 crore, their payment terms differ. Jupiter has offered to pay the full amount within 30 days of approval by the bankruptcy court, whereas NK Holdings has proposed paying the same sum over a five-year period.

Creditors are reportedly reviewing both the resolution plans for the hospital, which remains unresolved despite being admitted to the National Company Law Tribunal (NCLT) in March 2018.

SevenHills earlier owned two hospitals, one in Mumbai and another in Visakhapatnam. But, to speed up the stalled process, the bankruptcy court allowed creditors to sell the two assets separately. This move followed prolonged disputes between lenders and MCGM, and the Mumbai hospital being designated as a COVID-19 facility during the pandemic under the Disaster Management Act.

In July 2024, the NCLT approved a resolution plan submitted by MGM Healthcare to acquire the Visakhapatnam hospital for ₹171 crore.

The Mumbai property, however, continues to face hurdles. MCGM, which owns the land, has filed a claim of ₹140.8 crore towards unpaid rent. This claim had not been admitted by the resolution professional (RP) as of March 2023. The RP has also not submitted an updated list of claims to the Insolvency and Bankruptcy Board of India (IBBI).

SevenHills’ insolvency process has seen several twists. In July 2019, the NCLT had approved a ₹1,000-crore resolution plan by Dr Devi Shetty’s New Medical Centre (NMC). While MCGM initially challenged the decision, its appeal was rejected by the appellate tribunal. However, the Supreme Court later overturned both rulings in November 2019.

Lenders have blamed the delays on what they describe as a reversal by MCGM. They say the civic body had earlier agreed to NMC’s ₹102-crore offer, which included reserving 20% of beds for economically weaker patients.

MCGM later withdrew its support, arguing before the Supreme Court that it was not bound by the approved resolution plan since it had issued a notice to terminate the land lease before SevenHills entered insolvency.

After the pandemic, the RP restarted the sale process in 2023. Several healthcare chains, including Max Healthcare, KIMS Hospital and Virinchi Hospital, had expressed interest at the time, the report stated.

The total outstanding claims for the Mumbai hospital remain unclear, as the RP has not updated the list of verified creditors after the Visakhapatnam asset was sold.

As of March 31, 2023, admitted claims for both hospitals stood at ₹1,361 crore, including ₹1,273 crore owed to financial creditors. Meanwhile, JM Financial ARC is the largest lender, holding more than a 75% stake in the hospital.