Fortis shareholders give nod to acquisition by IHH Healthcare

The shareholders have also approved an increase in authorised capital of the company and alteration of the capital clause of a memorandum of association of the company, it added.
A Fortis hospital building in Gurgaon. (File photo | Reuters)
A Fortis hospital building in Gurgaon. (File photo | Reuters)

NEW DELHI: Fortis Healthcare’s shareholders gave their final assent for the beleaguered healthcare major’s takeover by Malaysia's IHH Healthcare.

“The shareholders of Fortis Healthcare have by an overwhelming majority of 99.69 per cent voted in favour of the issuance of equity shares on a preferential allotment basis. They have also approved by 99.99 per cent votes to reclassify members of promoter/promoter group to public shareholder category and classification of Northern TK Venture Pvt Ltd as a promoter,” Fortis said.

Following the announcement, Fortis Healthcare Chairman Ravi Rajagopal said that with this approval of preferential allotment of shares, the transaction is now only awaiting regulatory approvals. "We believe a partnership with IHH will further strengthen Fortis' operational platform and open new opportunities thereby placing the company in a far more strong and resilient position," Rajagopal added.

The company had, in an earlier notice for the EGM in July, announced that the consent of shareholders is being sought for issuance of 23,52,94,117 equity shares on preferential basis at a price of `170 per share aggregating up to Rs 4,000 crore to Northern TK Venture Pte Ltd. It had also asked shareholders to approve classification of Northern TK Venture Pte Ltd as 'Promoter' subsequent to the completion of the preferential allotment of equity shares.

The shareholders have also approved an increase in authorised capital of the company and alteration of the capital clause of a memorandum of association of the company, it added.

The company had also sought the approval of shareholders to reclassify 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 from the 'Promoter and Promoter Group' shareholder category to 'Public' shareholder category.

Fortis Healthcare CEO Bhavdeep Singh added that “... the proceeds (from the deal) will allow us to normalize our working capital and strengthen the overall balance sheet." The Fortis Healthcare board had approved a Rs 4,000-crore offer from IHH Healthcare for 31.1 per cent stake in it, valuing the cash-strapped firm at Rs 8,880 crore on July 13.

The transaction, to be carried out via IHH Healthcare's arm Northern TK Venture Pte Ltd, was to be followed up by an open offer for an additional 26 per cent stake in Fortis. IHH Healthcare is expected to shell out a total of Rs 7,300 crore to acquire 57.1 per cent stake, provided its open offer for 26 per cent stake is fully subscribed. Fortis Healthcare’s stock closed 0.86 per cent up at Rs 146.05 on BSE.

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