Mumbai/New Delhi: Fortis Healthcare Ltd had only Rs70 crore in the bank when the Gurugram-based company last declared its earnings and that forced Sunil Munjal and Anand Burman to set aside the need for due diligence and invest in the company, the Delhi-based businessmen said in a joint interview on Friday.

“There is a crying need right now for the company for liquidity, support. In the last earnings call that they made to the analysts, they said they have only Rs70 crore left in the bank. That is shocking for a company like Fortis. That was one reason why we said we will do without diligence," Munjal said.

“Second, the issues around this have become so public that there are public investigations going on. Once the investigation report comes out, one would have a reasonable amount of knowledge and information. The rest of it we are prepared to learn after this process is over," Munjal said.

Late on 10 May, the board of Fortis Healthcare approved a binding offer from Sunil Munjal’s Hero Enterprise and Dabur chairman Anand Burman’s family office.

According to the current offer, the Hero-Burman consortium will infuse Rs800 crore through a preferential allotment of equity shares at Rs167 a share. The group will put in another Rs1,000 crore through warrants at Rs176 per share.

Munjal said the track-record of former owners Malvinder Singh and Shivinder Singh does not worry him now. “We actually looked into Fortis twice earlier but both times we had thought about the Daiichi overhang.... We thought if we do get in and this Daiichi thing starts reigning down on us, that would not be smart and again diligence was not available at that time. That time there was a lot in the air but now it seems a lot is in the open about what the issues are," he said.

Burman allayed concerns about the buyers not having enough expertise in healthcare. “We (Dabur India Ltd) have been in the business of healthcare for the last 135 years. I think we bring a lot of outside knowledge to the table about how we could do things better, more efficiently than what exists today," said Burman, whose family also runs HealthCare at Home, wherein they install intensive care units at homes.

Munjal, on the other hand, has been directly associated with operations of a family-owned hospital in Ludhiana that claims to have 1,700 beds and over 20 specialities.

The two have the support of Yes Bank Ltd’s Rana Kapoor who, with around 15% stake in Fortis, is the single largest shareholder in the company. Kapoor got the Fortis stake in lieu of the loans that Yes Bank offered to Fortis.

Munjal will soon start talks with the rest of the institutional shareholders, including East Bridge and Jupiter India Fund, whose representative directors did not vote in favour of Munjal and Burman.

“Everything is possible through communication," Munjal said.

Meanwhile, IHH Healthcare expressed its disappointment over the decision made by the Fortis board and said they are “currently evaluating options".

Ranjan Pai of TPG-Manipal said, “What is not meant to be, you should not fight for it. It is up to the existing shareholders to approve it. We have done our bit."

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