IHH Healthcare acquires 31.1% controlling stake in Fortis for Rs 40 billion

Fortis Healthcare said on Tuesday it has issued 235.3 million equity shares through preferential allotment to IHH Healthcare Berhad for around Rs 40 billion, a move that helps the Malaysian firm take 31.1 per cent stake in the company.

The allotment has been done at Rs 170 per share.

IHH has now become the controlling shareholder in the company, Fortis Healthcare said in a filing to BSE.

The board of Fortis has also approved the appointment of four IHH nominees on the company's board, it added.

The Board of Directors of the company Tuesday approved the allotment of 23,52,94,117 equity shares through a preferential issue to Northern TK Venture Pte Ltd (a wholly-owned indirect subsidiary of IHH Healthcare Berhad) (IHH-NTK) at Rs 170 per share of Rs 10 face value, it added.

"Following this, the mandatory open offer for acquiring up to 26 per cent of the expanded capital from the existing shareholders of Fortis at Rs 170 per share for a consideration of up to Rs 33 billion would be completed in due course," it said.

"Depending on the shares tendered by the shareholders of Fortis, IHH-NTK would have between 31.1 per cent to 57.1 per cent stake on the expanded capital," Fortis Healthcare said.

The board has also approved the appointment of four IHH-NTK's nominees Tan See Leng, Low Soon Teck, Chan Boon Kheng and Bhagat Chintamani Aniruddha as additional directors of Fortis with immediate effect, it added.

Tan See Leng is the managing director (MD) and chief executive officer (CEO) of IHH Healthcare Berhad.

"The reconstituted Board to have a total of 7 members with 3 current directors and 4 additional directors nominated by IHH," Fortis Healthcare said.

Commenting on the development, IHH MD and CEO Tan See Leng said: "The acquisition of a controlling stake in Fortis Healthcare, one of the leading healthcare service providers in India, represents a transformational investment for IHH and demonstrates our commitment to invest considerable resources to expand and consolidate our footprint in India."

"With a clear and holistic strategy in place, we will work closely with Fortis' Board and management to pave the way for Fortis Healthcare to realise its full potential in the long run," he added.

"I am pleased to announce the completion of the investment by IHH in Fortis. With this, I welcome the new IHH nominated members on the Board," Fortis Healthcare Board of Directors Chairman Ravi Rajagopal said.

The reconstituted board will actively provide strategic direction and vision to the company and will ensure that the company's focus on clinical excellence, clinical outcomes, patient care and business results remains paramount, he added.

"The Board will be working closely with management to further strengthen governance and internal control frameworks on par with other leading organisations," Rajagopal said.

Shares of Fortis Healthcare Ltd closed at Rs 141.80 on BSE, up 1.95 per cent from the previous close.