Asia’s largest private healthcare provider, Malaysia headquartered IHH Healthcare, which was recently picked as the winning bidder in the hotly contested race for a controlling interest in Fortis HealthcareNSE 1.28 % is gearing up for round two of its consolidation strategy in its fourth home market, India, multiple individuals familiar with the company’s plans told ET NOW on the condition of anonymity.
“Post the requisite approval from regulators & shareholders and the closure of the Fortis Healthcare transaction, IHH plans to merge the rest of its India hospitals portfolio with the operations of Fortis Healthcare in the medium term, ” said one of the sources cited above. ET NOW was the first to report the development.
The Fortis Open Offer is expected to commence in August / September 2018 subject to certain conditions, including customary regulatory approvals including Competition Commission of India, Securities and Exchange Board of India and the Reserve Bank of India, and close by Q3 2018.
” Yes, that is the next step on the cards to ensure all India assets are housed under the same umbrella and there is no conflict in local markets. All stakeholders including lenders will be keen for a consolidation of the entire domestic portfolio,” added another source.
“Since post completion of the Fortis acquisition, IHH will become a direct pan-India rival of Apollo HospitalsNSE 0.96 %, IHH will explore either an exit/sale of its stake or buyout Apollo’s stake in the jointly run Apollo Gleneagles in Kolkata,” added a third source.
Currently, IHH is present across 5 cities in India with more than 1600 licensed beds across 7 hospitals, according to a recent fact-sheet on India operations shared by the company.
IHH Healthcare entered India in 2002 via a 50-50 joint venture between Apollo Hospitals and Parkway Pantai, our wholly-owned subsidiary, to form Apollo Gleneagles Hospital in Kolkata. In early 2015, IHH Healthcare acquired a 51.0% stake in Continental Hospitals, a hospital with a 750-bed capacity, in Hyderabad. Shortly after, it purchased a 73.4% acquisition of Global Hospitals with approximately 1,100 operational beds across hospitals in Chennai, Bangalore, Mumbai and Hyderabad.
If the deal goes through, IHH will be the second-largest private healthcare provider in India after Apollo Hospitals with a sharp rise in operational bed capacity. In terms of share of revenue, IHH’s exposure in India is expected to increase to 24% from 6% currently.
The target, Fortis Hospitals, operates a network of 34 hospitals across the country and internationally with a capacity of over 4,600 beds and employs more than 2,600 doctors and 13,200 support staff who catered to 2.6mn patients in FY2018.
In response to an email query from ET NOW, an IHH spokesperson said, “We do not comment on market speculation. Our focus is to ensure immediate stabilization of Fortis, which is currently facing significant challenges on multiple fronts including urgent liquidity constraints and operational issues. Our priority is to secure and stabilize Fortis by addressing its immediate funding needs to ensure the return to normality in terms of day-to-day operations.”
Source: Economic Times