Malaysia-based IHH Healthcare has acquired controlling stake of 31.1% in India-based Fortis Healthcare.
IHH Healthcare has appointed four persons to the board of Fortis Healthcare.
The board of the India-based firm gave its approval to the allotment of more than 230 million shares through preferential issue to Northern TK Venture, which is a fully owned indirect subsidiary of IHH Healthcare, at Rs170 [$2.36] per share of Rs10 face value.
Fortis stated: “With this preferential issue, IHH Healthcare has, through NTK, infused approximately Rs40bn [$556m] of primary capital into the company and NTK has become the controlling shareholder in the company with 31.1% stake on the expanded capital.”
After this, the mandatory open offer for purchasing up to 26% of the expanded capital from Fortis’ current shareholders at Rs170 every share for up to Rs33bn ($459m) would be completed in due course.
IHH Healthcare managing director and CEO Tan See Leng said: “The acquisition of a controlling stake in Fortis Healthcare, one of the leading healthcare service providers in India, represents a transformational investment for IHH Healthcare and demonstrates our commitment to invest considerable resources to expand and consolidate our footprint in India.”
Law firm Khaitan & Co. served as legal adviser to IHH Healthcare in the deal.
The new board has Tan See Leng along with other top executives, including IHH Healthcare chief financial officer Low Soon Teck; IHH Healthcare strategic planning & business development (M&A) group head and South East operations CEO Dr Chan Boon Kheng; and IHH Healthcare board member and Khazanah Nasional investments division for healthcare sector executive director Bhagat Chintamani Aniruddha.
The reconstituted board has seven members with three existing directors and four additional directors nominated by IHH Healthcare.
Fortis Healthcare chairman Ravi Rajagopal said: “The reconstituted board will actively provide strategic direction and vision to the company and will ensure that the company’s focus on clinical excellence, clinical outcomes, patient care and business results remains paramount. The board will be working closely with the management to further strengthen governance and internal control frameworks on par with other leading organisations.”
In July, IHH Healthcare secured the bid to purchase cash-strapped Fortis Healthcare, which operates 34 hospitals across India and overseas markets. Fortis has more than 4,600 beds, around 2,500 doctors and over 13,000 support staff. In fiscal 2018, the hospital provided service to more than 2.5 million patients.