The Hindu Business Line : Fortis Healthcare board clears Rs 1,000-cr rights issue

The board of directors of Fortis Healthcare Ltd at its meeting on Wednesday approved, in principle, the company’s plan to raise funds by issue of equity shares with warrants on a rights basis aggregating to Rs 1,000 crore.

This amount excludes the value of warrants, as and when exercised.

The offer would be made by March 2009 after getting approvals from the market regulator.

The proceeds of the rights issue would be used primarily for funding greenfield projects, including the upcoming Medi-City project in Gurgaon (Rs 400 crore investment in the first phase), redemption of preference shares, repayment of short-term debt (Fortis has a short-term debt of around Rs 200 crore), upgradation of facilities and tapping future investment opportunities.

Mr Yogesh Sareen, CFO, Fortis Healthcare, told Business Line that a significant amount generated through the rights issue will be utilised for growth opportunities.

Ratio, pricing by Feb

“Our plan to add 500 beds through organic and inorganic growth in FY09 is on schedule. For this, we are actively looking at acquisitions,” he added.

The share ratio and pricing per share would be decided and announced later. Company officials said that the details would be announced by February 2009.

Aggressive growth

Commenting on the rights issue, Mr Shivinder Mohan Singh, CEO & Managing Director, Fortis Healthcare Ltd, said: “We have fine-tuned our operating model and are ready for aggressive growth over the next few years”.

Mr Singh also said that the rights issue will enable the company to restructure its balance sheet and “set the base for a healthy future”.

Further, “this gives an opportunity to our shareholders to participate and benefit from our growth,” he said.

Fortis Healthcare scrip closed on the Bombay Stock Exchange on Wednesday at Rs 71.15, which is 1.65 per cent more than the previous close of Rs 69.50.

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