Fortis Healthcare approves demerger of its diagnostics business

The Board of Directors of Fortis Healthcare today approved a proposal to demerge its diagnostics business, including that housed in its majority owned subsidiary SRL Limited ("SRL") into another majority owned subsidiary, Fortis Malar Hospitals Limited ("Fortis Malar") pursuant to a composite scheme of arrangement and amalgamation.

The demerger shall be followed by SRL being merged with Fortis Malar as an integral part of the same composite scheme.

Fortis Malar operates a hospital facility in Chennai and is listed on the BSE Limited (the "BSE"). The composite scheme will also provide for the sale of its hospital business by Fortis Malar to Fortis Healthcare by way of a slump sale for a lump sum cash consideration, and the same shall precede the merger.

The name of Fortis Malar will subsequently be changed to SRL Limited and this company is proposed to be listed on the National Stock Exchange of India Limited (the "NSE"), in addition to its current listing on the BSE.

Appointed date for the slump sale, demerger and merger under the composite scheme is opening of business on January 1, 2017.

Commenting on the scheme, Malvinder Singh, Executive Chairman, Fortis Healthcare said. "We believe this will unlock immense value for all the shareholders. As a result of the new synergistic groupings, both the hospitals and diagnostic businesses will benefit from greater clarity, a stronger focus and an independent growth trajectory. Equally, this will enable the accelerated pursuit of their respective business goals while empowering them to reach their fullest potential."

Bhavdeep Singh, CEO, Fortis Healthcare Ltd, said, "Our hospitals and diagnostics businesses continue to perform equally well. However, in the longer term, they have a growth path of their own requiring distinctive strategies. The new arrangement resulting from the demerger will harness these unique capabilities and strengths, unlocking value by combining the flexibility with a focus on rapidly scaling up operations.