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Business News/ Companies / Munjal-Burmans, IHH sweeten Fortis bids, add new terms
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Munjal-Burmans, IHH sweeten Fortis bids, add new terms

The uncertainty around its sale has started to affect Fortis's hospital operations, with some doctors quitting their jobs

Sunil Munjal. Photo: Pradeep Gaur/MintPremium
Sunil Munjal. Photo: Pradeep Gaur/Mint

Mumbai/New Delhi: At least two bidders, IHH Healthcare Bhd and a group led by businessman Sunil Munjal, have sweetened their offers for the assets of troubled Fortis Healthcare Ltd ahead of the Tuesday deadline for submitting binding offers.

In its revised offer, IHH Healthcare said that its proposal of immediate equity infusion of Rs650 crore will now be at Rs175 per share, higher than the Rs160 apiece proposed earlier. The subsequent equity infusion of Rs3,350 crore will be at a share price not exceeding Rs175, the company said in a statement.

IHH, however, insisted that the company be allowed to inspect the books and assets of the hospital operator after an initial equity infusion.

Inspection of assets, or due diligence, has been a matter of concern for bidders of Fortis because the company’s books have not been audited since 2016, some of its land assets are under litigation and the Serious Fraud Investigation Office has been ordered to probe an alleged fraud related to diversion of funds.

The combine of Munjal and the Burman family have offered to infuse Rs1,800 crore directly into Fortis as part of their revised offer. That compares with the Rs1,500 crore they proposed to invest earlier. They also sought three seats on the board instead of two and added a new condition that an independent sale process should take place for SRL Laboratories, a unit of Fortis, and its proceeds be used to buy assets of RHT Holdings, a trust which holds Fortis’s real estate assets.

Munjal and Burmans did not seek an opportunity to do due diligence but said that if the right is granted to others, they would also want it.

Meanwhile, the uncertainty has started to affect Fortis’s hospital operations, with some doctors quitting their jobs.

“Equipment, especially in radiology, needed upgradation. There was a greater need for looking into these areas," said Dr. Vijay Kher, former head of the department of nephrology. He left Fortis Escorts Heart Institute and joined Medanta Medicity. “I started feeling that my services were not utilized to the best of capabilities," he said.

Dr. Rajesh Kumar Ahlawat, director of urology and renal transplantation, has also quit Fortis Hospitals.

Fortis Healthcare said that the company’s retention level remains among the best in the country.

“While attrition is a part of the normal course of any business, our retention levels remain among the best in the industry," the company said.

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Published: 01 May 2018, 11:02 PM IST
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