Bankers gear up for Fortis-Khazanah face-off

With Fortis Healthcare getting ready to raise a war chest of over Rs 10,000 crore (including internal resources ) to counter Khazanah’s bid to take control of Parkway Holdings, bankers are gearing up to participate in this endeavour.

Bankers said the Fortis management was in talks with banks for tying up the funds. Banks like RBS and ICICI Bank are expected to play a lead role in the loan syndication – a call that banks will take in the next 24-48 hours.

Already, RBS’s chief executive and Asia head are in Mumbai. Both are expected to meet the Fortis management.

Earlier in the day, Fortis Healthcare’s board approved plans to raise additional funds of Rs 8,750 crore — Rs 2,750 crore from the security market and borrowings of Rs 6,000 crore.

This move is being seen as a preparation for a counterbid to acquire a 100 per cent stake in Singapore-based Parkway Holdings.

“It does not make sense for Fortis to go for only 51 per cent stake. In all likelihood, they will go for 100 per cent control,” said an investment banker associated with the transaction.

The investment banker expects the counter bid to come in by this weekend itself.

Bankers said that earlier, the lenders did not have access to Parkways’ cash flows. Loans were given against shares of the company.

But, now they are expected to be more liberal as the company’s balance sheet can be used for raising funds.

“We need to see how much loan can be raised on Parkway Holdings’ cash flows, how much can Fortis’s book can handle and to what extent promoters need to fill in,” said a banker involved in the negotiation.

Khazanah proposed a partial offer to acquire a 51 per cent in Parkway, Asia’s biggest healthcare provider, last month.

Bank of India, which has presence in Singapore, had participated in the first round of funding up to $50 million.