Despite multiple hurdles, the takeover of Fortis Healthcare Ltd by Malaysian healthcare giant IHH has seen the light of the day. The Board of Directors of Fortis Healthcare Ltd on Wednesday approved the allotment of 23.53 crore equity shares through a preferential issue to Northern TK Venture Pte Ltd, a wholly owned indirect subsidiary of IHH Healthcare Berhad (IHH-NTK) at Rs 170 per share of Rs 10 face value.
With this preferential issue, IHH has, through NTK, infused approximately Rs 4,000 crore of primary capital into the company and NTK has become the controlling shareholder in the company with up to 31.1 per cent stake of the expanded capital.
Following this, the mandatory open offer for acquiring up to 26 per cent of the expanded capital from the existing shareholders of Fortis at Rs 170 per share for a consideration of up to Rs 3,300 crore would be completed in due course. Depending on the shares tendered by the shareholders of Fortis, IHH-NTK would have between 31.1 per cent to 57.1 per cent stake on the expanded capital, Fortis said in a press statement today.
Board reconstituted
On the basis of the recommendation of the Nomination and Remuneration Committee, the Board of Directors of Fortis (board) also approved the appointment of IHH-NTK’s nominees on the board. The reconstituted board will have a total of 7 members with 3 current directors and 4 additional directors nominated by IHH. Last week, Fortis CEO Bhavdeep Singh stepped down from his position to pave way for new members of the IHH board.
The board has appointed Dr Tan See Leng as an Additional Director of Fortis with immediate effect. Leng is the Managing Director and Chief Executive Officer of IHH Healthcare Berhad. He is also the Group CEO and Managing Director of Parkway Pantai Limited and serves on the boards of various IHH subsidiaries. He has over 27 years of experience in the healthcare sector.
Low Soon Teck has also been appointed as an Additional Director of Fortis. Teck is the Group Chief Financial Officer of IHH Healthcare Berhad. He has over 20 years of experience in finance, legal and general management in leadership roles.
Another additional director and IHH representative on the Fortis borad is Chan Boon Kheng as an Additional Director. Kheng is the Group Head, Strategic Planning and Business Development (Merger and Acquisition) of IHH Healthcare Berhad. He is also the CEO for its South East Operations. Chan has more than 20 years of experience as a healthcare executive working in several countries in South East Asia and West Asia.
The fourth additional director is Bhagat Chintamani Aniruddha. He is on the Board of IHH and is the Executive Director in the Investments Division of Khazanah Nasional Berhad ("Khazanah") and also leads Khazanah's India operations. He also serves on certain boards and board committees of IHH subsidiaries.
Ravi Rajagopal, Chairman, Board of Directors, Fortis Healthcare Ltd said, “I am pleased to announce the completion of the investment by IHH in Fortis. With this, I welcome the new IHH nominated members on the board. The reconstituted board will actively provide strategic direction and vision to the company and will ensure that the company’s focus on clinical excellence, clinical outcomes, patient care and business results remains paramount.”
IHH Managing Director and CEO, Dr Tan See Leng said, “The acquisition of a controlling stake in Fortis Healthcare represents a transformational investment for IHH and demonstrates our commitment to invest considerable resources to expand and consolidate our footprint in India. With a clear and holistic strategy in place, we will work closely with Fortis’ board and management to pave the way for Fortis Healthcare to realise its full potential in the long run. We look forward to continually providing the best-in-class healthcare services and delivering excellent clinical outcomes for patients that both IHH and Fortis Healthcare are known for.”