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IHH to acquire 35pct stake in Fortis

2018.05.29 09:58:44 | 2018.05.29 10:01:17
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IHH Healthcare Bhd believes it will secure a 34 per cent to 35 per cent stake in India’s Fortis Healthcare Ltd, according to managing director Dr Tan See Leng (right). [NSTP/SYARAFIQ ABD SAMAD]

IHH Healthcare Bhd believes it will secure a 34 per cent to 35 per cent stake in India’s Fortis Healthcare Ltd, according to managing director Dr Tan See Leng (right). [NSTP/SYARAFIQ ABD SAMAD]

IHH Healthcare Bhd believes it will secure a 34 per cent to 35 per cent stake in India’s Fortis Healthcare Ltd, assuming its bid for the Indian firm is successful.

"The consensus we have received from Fortis’ minority shareholders is that they do not want to exit.

“Some of them are also IHH shareholders and they want to continue riding on growth with us," IHH managing director Dr Tan See Leng said after the group`s annual general meeting here today.

Dr Tan said the details would be made clearer after a board meeting scheduled on May 30.

This included the due diligence on the investigation against Fortis’ founders, who had been alleged to have siphoned off around US$78 million out of the publicly-traded hospital, Fortis Hospitals Ltd without board approval a year ago, as reported by Bloomberg in February.

“That is why we asked for due diligence. Today, the company is ongoing investigation and the result of the legal investigation has not been reported. And up to today, the audited accounts are still not released.

“A lot of it will depend on May 30, what they decide to report. We are very carefully advised by our legal and financial advisers, as well as our investment bankers on what will be our next step,” he said.

Asked if the money-laundering investigation would affect IHH’s bid on Fortis, Dr Tan said, “Let’s not speculate, there are still quite a lot changes that could happen 48 hours from now,” he said.

On May 2, IHH announced that it had revised upwards its takeover offer for Fortis, where it offered to make an immediate equity infusion at 175 Indian rupees per share and a subsequent equity infusion at a per share price not exceeding 175 Indian rupees.

Meanwhile, Dr Tan said IHH was in a comfortable position to be on an active lookout for acquisitions, with a cash balance of RM6.1 billion, as it expands its home market into 2018.

In addition to the cash balance, the company also has an unutilised five-year revolving credit facility S$1.8 billion banking facility, secured by its subsidiary, Parkway Pantai Ltd.

IHH managing director and chief executive officer Dr Tan See Leng said the company’s key focus markets for this year are China, India, Southeast Asia region as well as Malaysia and Singapore.

“In regards to acquisitions, of course we are always on the lookout. But we are also mindful on the fact that the space that we are in as we are in the premium segment.

“So, whenever we look at acquisitions, there are three things we asked ourselves - if we add value to the asset, if we are then able to extract value from the asset and how does it add to the synergy in terms of its positioning to the entire group.

“We are also ramping up the new organic hospitals to ensure that we capture the synergies. As we identify more near term home markets and key growth markets, we would want to continue to expand,” he told reporters after IHH’s annual general meeting here today.

By New Straits Times(Published: 28/05/2018)

https://www.nst.com.my/business/2018/05/374140/ihh-acquire-35pct-stake-fortis

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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