NEW DELHI: Beleaguered hospital chain Fortis Healthcare will have to wait a bit longer to find a new owner as its newly reconstituted Board has decided to begin a fresh bidding process with interested parties for a deal and has sought expressions of interest (EOI) by May 31.
The expected development comes a day after when Munjal- Burman duo, who won a five-way bid earlier this month for the healthcare chain, gave their consent to reopen the bidding process for sale of Fortis Healthcare.
“The Board in its meeting held on May 29, 2018, has decided to initiate a fresh, time-bound process to optimise the company’s and shareholders’ short and long-term interests,” Fortis said in a regulatory filing. The new Board has also terminated the Munjal-Burman combine’s offer, which was recommended by the previous Fortis board.
The Board has now decided to invite original three bidders — namely Munjal-Burman Consortium, TPG-Manipal Consortium, and IHH Healthcare to participate in the process. Apart from the three original bidders, the Board has said that other interested parties can also participate in the second round of bids and has asked them to submit their EOI by the specified date.
Based on the EOI submitted, the Board shall, in its absolute discretion, shortlist Other Bidder(s) and inform them of such decision by June 1, 2018, the company said. Post the short listing process, Bidders (“Invited Bidders” and “Other Shortlisted Bidders”) will be provided 10 days for financial and legal due diligence and an opportunity to interact with the management and advisors who have conducted vendor due diligence for the company.
The Fortis Board has also led down a set minimum features for the new binding bids, wherein it has asked the bidders to have minimum investment of rupees 1,500 crore into Fortis by way of preferential allotment, plan for funding of RHT acquisition with long-stop date of September 30, 2018, a plan for providing exit to private equity investors of SRL Diagnostics Ltd, plans for retention of current management and employees, among other features.
Fortis had appointed Standard Chartered Bank and Arpwood Capital as financial advisors to the transaction, and Cyril Amarchand Mangaldas and Vaish Associates as legal advisors.
Rs 503 crore fine for Fortis subsidiary
Fortis Healthcare’s subsidiary Escort Heart Institute & Research Centre has been directed to deposit Rs 503.36 crore to Director General of Health Services within a month on account of unwarranted profit allegedly made by it by not complying with the conditions of lease deed, the company said in a filing. Delhi Development Authority had granted the land to the hospital on the condition that it would provide free treatment to 25 per cent of its patients. In 2005, the company contested that just 10 per cent of the seven acres of land was granted with this condition.