IHH Healthcare says ready to proceed with Fortis open offer once SEBI gives go-ahead

Malaysias IHH Healthcare on Friday said it is ready to proceed with its stalled open offer for 26.1 per cent stake in Fortis once capital markets regulator SEBI gives it a go-ahead.

Malaysia's IHH Healthcare on Friday said it is ready to proceed with its stalled open offer for 26.1 per cent stake in Fortis once capital markets regulator SEBI gives it a go-ahead. The company, which currently is the largest shareholder in Fortis with a 31.17 per cent stake, said it remains fully committed to Fortis and India. ''We certainly understand the frustration Fortis investors have felt over the past four years around the uncertainty of the IHH open offer. With the recent Supreme Court judgement ruling making clear that we have conducted our investment into Fortis in a fair and transparent manner, we are discussing with Securities and Exchange Board of India (SEBI) to move ahead with the offer,'' IHH Healthcare Managing Director and CEO Kelvin Loh said in a statement. Should they concur and approve, IHH is ready to proceed with the open offer as soon as possible, he added. Loh said Fortis is IHH's key growth platform in India. ''We are hopeful for a positive outcome so that we can explore more avenues to work with Fortis to accelerate its growth plans, together serving the healthcare needs of patients in India with care and excellence, while protecting the interests of our stakeholders,'' he added. IHH Healthcare noted that following the recent judgment of the Supreme Court of India, the Special Leave Petition, the Original Contempt Petition and the Suo Moto Contempt Petition are disposed of. ''The Honourable Supreme Court has not found nor indicated any wrongdoing by IHH in terms of our investment into Fortis in its final written judgment dated September 22, 2022. There is also currently no court order pending against IHH in these proceedings,'' it said. Accordingly, IHH is now in discussion with SEBI to determine the next steps pertaining to the mandatory tender offer in Fortis, in full compliance with all requisite regulations, the Malaysian firm said. ''Should IHH receive approval from SEBI, it will be ready to undertake the Offer in a timely manner,'' it said. In November 2018, IHH had acquired, via a preferential allotment, a 31.17 per cent stake in Fortis by infusing fresh capital of Rs 4,000 crore. At that time, Fortis was in operational and financial distress, thus the capital was much needed. The IHH-Fortis deal is stuck due to a legal battle between Daiichi and the former promoters of Fortis Healthcare. In September this year, the Supreme Court awarded six months jail term to former promoters of Fortis Healthcare Ltd -- Malvinder Singh and Shivinder Singh -- in a case related to the sale of shares of Fortis to IHH Healthcare.

The former promoters of Fortis Healthcare Ltd were facing the court battle after Japanese firm Daiichi Sankyo challenged the Fortis-IHH share deal to recover the Rs 3,600 crore arbitration award that it had won before a Singapore tribunal against the Singh brothers. In 2018, when some Indian lenders sold the pledged shares of Fortis Healthcare to the Malaysia-based firm, Daiichi went to court alleging that the former promoters of Fortis had assured them that their shares in the Indian hospital chain will cover the arbitral award amount. Later, the Supreme Court had ordered status quo with regard to the sale of controlling stakes of Fortis Healthcare to IHH Healthcare by Malvinder Singh and Shivinder Singh. The apex court's order put on hold IHH's open offer for an additional 26.1 per cent stake in Fortis, which was scheduled to commence on December 18, 2018 and close on January 1, 2019, entailing a total sum of Rs 3,300 crore. The proposed open offer was subsequent to IHH clinching a Rs 4,000-crore deal to acquire 31.1 per cent stake in Fortis Healthcare in July 2018. IHH had pipped rival Manipal-TPG combine in the race. In a separate statement, Fortis Healthcare said its consolidated net profit increased by 28 per cent to Rs 167 crore for the second quarter ended September 30, 2022. The healthcare major had reported a net profit of Rs 130 crore in the July-September period of last fiscal. Revenue from operations rose to Rs 1,607 crore for the September quarter as compared with Rs 1,462 crore in the year-ago period.

''We remain hopeful of a progressively improving performance as we go through the remainder of FY23,'' Fortis Healthcare MD and CEO Ashutosh Raghuvanshi stated.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)