Malaysia's IHH Healthcare has made a revised offer to infuse funds in the embattled hospital chain Fortis Healthcare, which includes a binding proposal of immediate equity injection of Rs 650 crore into the company.
In a letter written to the board of directors of Fortis Healthcare, Tan See Leng, MD and group CEO of IHH Healthcare, has also made a non-binding offer to infuse up to Rs 3,350 crore through a subsequent preferential issue and allotment of equity shares upon further due diligence.
“Our revised proposal is based on our assessment, from publicly-available information, that the company needs an equity infusion totaling Rs 4,000 crore to meet immediate liquidity requirements for working capital and other near-term funding requirements, including the buyout of the asset portfolio of RHT Health Trust as well as long-due infrastructure upgrades,” said Leng.
IHH says it is willing to immediately invest Rs 650 crore into Fortis Healthcare by way of a preferential allotment of equity shares at Rs 160 per share, for which it wants rights to appoint two directors on the board.
This binding commitment is also subject to IHH being granted immediate access to carry out a legal and financial due diligence to evaluate the subsequent equity infusion.
“As a part of the due diligence, we would expect that we and our advisors would have access to your auditors, Deloitte as well as Luthra and Luthra, in connection with the ongoing investigations into the company. Our request for due diligence prior to the subsequent equity infusion stems from the inability of the statutory auditors of the company to opine on its financial position as at 31 December 2017 and the regulatory investigations that are currently underway,” said Leng.
IHH Healthcare is one of the many parties looking to acquire the troubled Fortis Healthcare. The companies in the race include China's Fosun Health Holdings, Manipal-TPG combine, Burman Family Office and Hero Enterprise Investment Office combined and the KKR-backed Radiant Life Care.
On Monday, Hero Enterprise Investment Office and companies part of the Burman Family Office had extended the validity period of their improved offer till May 4. The two had made an binding offer to invest Rs 1,500 crore directly into Fortis Healthcare.
The developments follow Fortis Healthcare board constituting an expert advisory committee to oversee the evaluation process and function as an advisor to the board.
The committee is headed by Deepak Kapoor, former chairman of Price Waterhouse Coopers (PwC) India and members include Renuka Ramnath, former MD and CEO of ICICI Venture and Lalit Bhasin, president, Society of Indian Law Firms and managing partner of Bhasin & Co.
Fortis Healthcare shares closed up 0.9 per cent at Rs 151.55 on the BSE on Tuesday.