Comments
As the Fortis Healthcare case comes up at the Supreme Court, IHH Healthcare Berhad said it was committed to growing the Indian hospitals network in which it had acquired a controlling stake in 2018.
Legal tangles
The IHH statement comes ahead of the apex court hearing (February 10) on whether IHH can proceed with its open offer to acquire additional shares in Fortis. The group had acquired a 31 per cent controlling stake in Fortis in 2018, which triggered a mandatory open offer to acquire another 26 per cent of Fortis shares from the market. The open offer, though, could not proceed due to ongoing legal proceedings pending before the Court, the Malaysia-headquartered IHH said.
After multiple bids and counter-bids, IHH had eventually bagged the hospital chain. However, Fortis Healthcare has been caught in a legal cross-fire between Japanese drugmaker Daiichi Sankyo and the Singh brothers Malvinder and Shivinder, the promoter family of Fortis and the erstwhile drug company Ranbaxy, on another deal gone sour.
IHH, however, maintains that it had gone through the transaction with the necessary corporate and regulatory approvals in accordance with all applicable laws.
“Growing in India remains a priority for IHH as it is one of our four home markets, along with Malaysia, Singapore and Turkey. We respect and have full faith in the judicial process in India and look forward to a favourable outcome so we can proceed with the open offer. This will allow IHH to further invest in Fortis to provide even more support to the Indian healthcare sector, especially in critical times like now with Covid-19.,”said Dr Kelvin Loh, Managing Director and CEO, IHH Healthcare.
Between Fortis and IHH’s Global Hospitals and Continental Hospitals, the group is a leading private healthcare operator in India with a network of more than 30 hospitals, it added.
On recovery path
As the largest shareholder and working closely with the Fortis management team, IHH has put in place and continues to execute on a turnaround plan for Fortis which had been facing financial difficulties, the note said. “Over the past two years, Fortis has progressively strengthened its balance sheet, improved its financial liquidity as well as streamlined its organisational structure to become more efficient. This has helped Fortis remain resilient amid the impact of Covid-19..,”it said.
In its latest financial results for Q3 FY2021, Fortis posted a strong recovery from the previous quarter on an accelerated recovery and pick-up in business momentum, IHH said. “Its robust performance means it is now positioning for growth and expansion of both of its core businesses — hospitals and diagnostics.”
On August 14, 2020, Fortis announced its intent to rebrand as ‘Parkway’, an IHH brand, which will be rolled out once it receives approval from the Court, the note said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.