IHH Healthcare Berhad may merge its existing India hospitals with recently acquired Fortis Healthcare to become the second largest private Healthcare provider in India. It is currently operating in four home markets- India, Malaysia, Singapore, and Turkey.
‘Post the requisite approval from regulators & shareholders and the closure of the Fortis Healthcare transaction, IHH plans to merge the rest of its India hospitals portfolio with the operations of Fortis Healthcare in the medium term’, ET cites a source stating this information.
A 57.1% stake in Fortis
IHH will hold 57.1% in a debt-ridden Fortis once proper regulatory approvals are obtained for the expected open offer in August/September this year. IHH recently acquired Fortis Healthcare for ₹4000 cr and now holds a 31.1% in the company. It will invest a further ₹3,300 cr through a mandatory offer in the form of cash exits to 26% of shareholders.
‘Since post completion of the Fortis acquisition, IHH will become a direct pan-India rival of Apollo Hospitals, IHH will explore either an exit/sale of its stake or buyout Apollo’s stake in the jointly run Apollo Gleneagles in Kolkata,’ ET cited another source quoting this.
Indebted Fortis
There has been significant changes in the ownership and promoter shareholding in the company. Promoter shareholding dropped down to 0.77% (approx) from 34.4%(approx) previously. The Mr. Malvinder Mohan Singh, Executive Chairman and Dr Shivinder Mohan Singh, Non-Executive Vice Chairman resigned owing to the High Court’s decision in the Daiichi Sankyo case. A Management Committee oversees the functioning of the company from a strategic and operational perspective.
The Singhs (previous promoters) sold Ranbaxy Laboratories to Daiichi Sankyo in 2008 for ₹9,576 crores. However, they concealed the probe that Ranbaxy was facing with the Food and Drug Administration in the US from Daiichi Sankyo. The High Court passed an international arbitral award of ₹3,500 cr in favor of Japanese pharma major Daiichi Sankyo.
Rossana Rashid, an independent non-executive director with IHH since 2012, previously voted against the deal owing to the risk factors and the audited financial statements of Fortis for the year ended 31 March 2018. However, she later noded for the proposal terming it to be in the best interest for the company.