This has paved the way for Northern TK Venture Pte Ltd to become promoter or promoter group of Fortis Healthcare
The shareholders of troubled Fortis Healthcare unanimoulsy voted in the favour of Mayalsian IHH Healthcare Berhad's wholly owned subsidiary Northern TK Venture Pte Ltd proposal to acquire troubled Fortis Healthcare Ltd.
An extraordinary general meeting (EGM) was held on Monday to put to vote the offer finalised by Fortis Healthcare's management a month ago.
Fortis had also sought nod through e-voting to reclassify the Singh family from being promoter and promoter group to 'public sahareholder'. As on quarter ended June 2018, Malvinder Mohan Singh, Malvinder Mohan Singh Trust, Shivinder Mohan Singh, Harpal Singh, Abhishek Singh, Fortis Healthcare Holdings Pvt Ltd, Malav Holdings Pvt Ltd and RHC Holding Pvt Ltd have 0.74% stake in this company. Another 14.39% of holdings is either pledged or encumbered by them.
This has paved the way for Northern TK Venture Pte Ltd to become promoter or promoter group of Fortis Healthcare. "A strong support was shown and shareholders overwhelmingly voted in favour of the proposals," said Bhavdeep Singh, chief executive officer of Fortis Healthcare, in a media conference call.
As per the offer, IHH Healthcare will buy a 31.10% stake in Fortis for Rs 4,000 crore by valuing the chain of hospitals at Rs 8,880 crore. Secondly, through an open offer, IHH Healthcare's Northern TK Venture Pte Ltd will buy another 26% stake from the public shareholders.
Through the two transactions, IHH Healthcare is expected to shell out around Rs 7,300 crore to own 57.10% of the healthcare company.
The next approval awaited is from Competition Commission of India.
When asked about ongoing Daiichi Sankyo litigation in the Delhi High Court and its implication on the deal, Singh said there will not be any restriction on the transaction as the issue is pertaining to Singh Brothers and it has no connection with the healthcare company.
On Tuesday, Fortis Healthcare reported a consolidated net loss of Rs 52.80 crore as compared to Rs 22.61 crore profit a year ago.
The company's consolidated total income from operations fell to Rs 1,070.55 crore in the June quarter as against Rs 1,214.22 crore a year ago.
"Medical industry in India has gone through a very turbulent time," Singh said, as pricing on stents went down followed by new taxation regime coming into place.
The company has been facing liquidity crunch for operations, which even resulted in delayed payments to vendors. This coupled with lower occupancy hit their overall business and income. Around a year ago, the occupancy at their hospitals varied between 75% to 80%, which fell to 62% during the year.
"In July occupancy improved to 67% and during the first half of August it has reached 68%. So, business is coming back and we don't see any challenges anymore. Our target would be to further grow occupancy levels in excess of 70% by Q4 FY19 expecting to translate into a significantly better operating performance," said Singh.
Apart from improving occupancy, the management now plans to focus on recruit more doctors in the specialities of medical, surgical, oncology, orthopaedics, liver transplant and neurology; relaunch marketing initiatives and campaigns; cost management; commissioning new beds at Arcot Road, Ludhiana, BG Road and Noida; launch of new specialities like oncology, liver transplant, bone marrow and heart transplant; getting medical equipment at FMRI, BG Road and Mulund hospitals and normalise working capital cycle.
On Tuesday, share price of Fortis Healthcare gained 0.86% or Rs 1.25 to close at Rs 146.05 per share.
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