APOLLO Hospitals will issue non-convertible debentures (NCD) to close a bank loan secured at high interest rate.

The company will raise Rs 100 crore using the NCDs, which will be issued to corporate entities and investment firms. An interest rate of 9.5 per cent to 10 per cent will be offered for a term of five to seven years. The funds will be used to close a loan, which was availed earlier at an interest rate of 12.5 per cent for a three-year period.

The board of directors of the company has approved the NCD issue and the company has engaged merchant bankers to identify investors. The issue is likely to come into the market over the next 10 to 15 days..

This is just an arrangement to save on the higher outgo on interest rates.

Currently we are not looking for external funding for our expansion activities.

The company is setting up 13 new hospitals and expanding capacity of four of its existing facilities at a total cost of Rs 1646 crore.

This will be done through internal accruals and debt and for any additional funds, warrants have been issued to the promoters.

The new projects will add a total of 2860 beds by FY15," a company official said on condition of anonymity