IHH assumes control of Fortis, board approves Rs 4,000 cr preferential allotment
New Delhi: The board of Fortis Healthcare on November 13 approved a preferential allotment of 23,52,94,117 equity shares to Northern TK Venture, a wholly-owned subsidiary of IHH Healthcare, at Rs 170 per share of face value Rs 10.
With this preferential issue, Malaysia's IHH has, through NTK, infused Rs 4,000 crore of primary capital into the company. NTK has become the controlling shareholder in the company with 31.1 per cent stake of the expanded capital.
IHH said the mandatory open offer for acquiring up to 26 per cent stake from existing shareholders of Fortis would be completed in due course. At Rs 170 per share, the total consideration works out to Rs 3,300 crore.
Depending on the shares tendered by Fortis' shareholders, IHH-NTK would hold anywhere between 31.1 per cent to 57.1 per cent stake in the expanded capital.
Board reconstituted
The board also approved the appointment of four IHH nominees on Fortis board. These include: Dr. Tan See Leng, Managing Director and Chief Executive Officer of IHH; Low Soon Teck, Group Chief Financial Officer; Chan Boon Kheng, Group Head, Strategic Planning & Business Development; and Bhagat Chintamani Aniruddha, Executive Director, Investments Division of Khazanah Nasional Berhad.
The reconstituted board will have a total of seven members with three current directors and four additional directors nominated by IHH. “The acquisition of a controlling stake in Fortis represents a transformational investment for IHH and demonstrates our commitment to invest considerable resources to expand and consolidate our footprint in India,” said IHH's Leng. He added that with a clear and holistic strategy in place, IHH is working closely with Fortis’ management to help it realise its full potential in the long run.
Ravi Rajagopal, Chairman of Fortis Healthcare, said the board will be working closely with management to further strengthen governance and internal control frameworks on par with other leading organisations.
Fortis CEO Bhavdeep Singh said the business was showing signs of stabilisation and will be further driven by IHH’s investment in the company and the buyback of Religare Health Trust will significantly enhance its operating profitability.
Fortis operates healthcare delivery services in India, Dubai, Mauritius and Sri Lanka with 43 facilities including projects under development, about 9,000 potential beds and 378 diagnostic centres.
