Fortis Healthcare Ltd. reported that it has received an investment totaling to Rs.1,250 crore from Hero and Burman Group in a joint investment offer.
The investment, which converts to around $192 million, will be made through preferential allotment of shares. According to an exchange filing made by Fortis on Thursday, the proposal comes with terms and conditions. One of these terms is that the immediate investment to be made is Rs.500 crore. The remaining Rs.750 crore will be done within three weeks after diligence is completed.
The race to gain control over Fortis, India’s second-largest chain of hospitals, is intensifying as more bids are coming through. According to a report by LiveMint, an Indian firm backed by TPG made a better offer compared to its initial investment proposal while IHH Healthcare Bhd. made a proposal of $1.3 billion.
Fortis shares have climbed by over 20% over the course of the month. The shares were priced at Rs.154 in Mumbai as of 9:42 am.
The Hero and Burman group hold about a 3% stake in Fortis and are concerned about the future of the company and its requirements to fund its immediate needs in order to develop an overall long-term value of the enterprise.
The two Indian businesses had entered into talks with Fortis back in March to debate the possibility of striking a deal. The talks fell through as the management of Fortis then said that there wasn’t enough time on hand to offer an opportunity for due diligence.
Sunil Kant Munjal of Hero Enterprise and Mohit Burman of the Burman Group stated that their offer is a simple one and does not require any change to the present structure, assets and operations of Fortis. The proposal is such that it can be put into place over a minimal period of time. This will enable the company to throw focus on growing and stabilizing operations.