Apollo Hospitals gives letter of comfort to Banks helping subsidiaries to raise funds

Two of the subsidiaries, Apollo Health and Lifestyle and Apollo Specialty Hospitals of Apollo Hospital will be availed the credit facilities by issuing a letter of comfort to Yes Bank and HDFC Bank by the Hospital.

Apollo Hospitals has passed a comfort letter of Rs 71 crore to Yes Bank to permit Apollo Health and Lifestyles raise debt. Another letter of comfort amounting to Rs 30 crore is issued to HDFC Bank to enable Apollo Specialty Hospital, a step down subdiary, to raise funds.

The letter of comfort works like a guarantee wherein Apollo Hospitals will step in to honour the dues in case two of its subsidiaries fail to repay the loans in time. At times, letter of comfort improves the rating of the debt instruments and thus helps in reducing interest rates charged on the loan.