The Hindu Business Line : Fortis to inject Rs 25 cr into Malar Hospitals

Chennai, Sept. 13 Fortis Healthcare Ltd proposes to inject up to Rs 25 crore into Malar Hospitals to upgrade facilities, said Mr Daljit Singh, President, Fortis Healthcare.

Fortis Healthcare, through its wholly owned subsidiary, International Hospital Ltd and Oscar Investments Ltd, a promoter group company, acquired Malar Hospitals. IHL acquired 28 per cent (39 lakh shares) of the current equity base of 1.39 crore shares of Malar Hospitals from its promoters at Rs 30 per share. As per the agreement signed by Fortis and Malar Hospitals, International Hospital and Oscar Investments together would settle Malar Hospital’s Rs 14-crore debt, which would be converted into equity thereby expanding the equity capital of the company.

As a result, Fortis would get another 25 per cent of the expanded capital (International Hospital’s 18 per cent and Oscar Investments’ 7 per cent) through preferential allotment. Thus, Fortis’s total holding in Malar Hospitals will be 46 per cent of the expanded capital (as the current 28 per cent would be diluted to 21 per cent of the expanded equity capital).

Open offer

Fortis, on Wednesday, made an open offer to acquire another 20 per cent from the public at Rs 30 per share.

According to Mr Daljit Singh, Fortis currently earns Rs 40 lakh to Rs 1 crore per bed per year. “Considering this, the acquisition of 180-bed Malar Hospitals is a good deal. And, we are also looking to expand our presence further in Chennai,” he said. According to him, the company’s overall expansion strategy includes setting up greenfield projects and acquiring running facilities. It has 12 hospitals across the country and four are under various stages of construction.