New Delhi: Hospital chain Fortis Healthcare Ltd announced plans to raise up to Rs1,000 crore through a rights issue of equity shares with warrants, after its board approved expansion plans.
The proceeds will be used primarily for future investments in greenfield projects, including the Fortis Medi-City project in Gurgaon, redemption of preference shares, repayment of short-term debt and facility upgrades, the company said in a statement.
Speeding ahead: Fortis managing director Shivinder Mohan Singh says the firm was ready for aggressive growth over the next few years. Madhu Kapparath / Mint
“We are ready for aggressive growth over the next few years. The rights issue will enable us to restructure our balance sheet and set the base for a healthy future,” said chief executive officer Shivinder Mohan Singh.
In a telephone interview, Yogesh Sarin, Fortis’ chief financial officer, denied published rumours that the company was in talks to acquire stakes in hospital chains Wockhardt Hospitals and Manipal Health Systems Pvt. Ltd. “There are no such talks with either Manipal or Wockhardt till now,” he said.
Sarin said while Fortis is hungry for growth, its current strategy is to acquire stand-alone hospitals and not chains. “We will be adding 500 beds by March 2009,” he said. “About 20% of the proceeds from the rights issue will be invested in hospital acquisitions.”
Singh had previously told Mint that Fortis is “going to pick up companies and finish our national expansion faster than we had anticipated earlier. Our promoters are backing us”.
Fortis is targeting to reach 40 hospitals by 2012 with a total expenditure of $500 million (about Rs2,450 crore today).
Singh also said Fortis was trying for a deal with Haryana-based Alchemist Hospital. Fortis has 23 hospitals.