Fortis Healthcare has raised Rs150 crore bridge loan from RattanIndia Finance to keep the struggling hospital operator afloat till it finds a buyer
Mumbai: Fortis Healthcare Ltd, which is weighing multiple takeover offers for its assets, has got a Rs150 crore bridge loan from RattanIndia Finance to keep the struggling hospital operator afloat till it finds a buyer, amid a credit squeeze.
The non-banking financial company has provided the funding to help Fortis avert bankruptcy, two people close to the development said, requesting anonymity.
Fortis has been grappling with legal hurdles and liquidity crises for a while. The healthcare firm reported a consolidated loss of Rs37 crore in the quarter ended 31 March 2017, the latest available financials of the company showed.
“The funds raised will be used for meeting operational expenses and improving cash flows in the short term. The repayment will be done after the new promoters come in," said one of the two people cited above.
RattanIndia Finance is an equal joint venture between RattanIndia Group and US-based private equity firm Lone Star Funds. Emails sent to RattanIndia and Lone Star did not elicit any response.
Meanwhile, Malaysian firm IHH Healthcare Bhd, which had submitted a non-binding offer for acquiring Fortis hospitals, on Monday said that the Fortis board “has indicated its inability to engage" with it as it has entered into a binding agreement with TPG Capital-backed Manipal Hospital Enterprises Pvt. Ltd for the deal. IHH is now considering launching an open offer in a bid to acquire Fortis, said the second person cited earlier.
Later in the day, Fortis in a press release said that its board will be meeting this week “to look at all eligible options and determine the future course of action that is in the best interests of the company, employees and shareholders."
The statement mentioned the combined offer received from Hero MotoCorp’s Sunil Munjal and Burmans of Dabur Group along with bids received from Manipal-TPG Capital as well as IHH. It did not specify if IHH was still eligible. The Fortis board will be meeting during the week to discuss the proposals.
Manipal Group promoter Ranjan Pai said that the firm has not firmed up its response to a potential open offer from IHH.
“We have said that we are not going to be irrational bidders for this asset. We are not engaging with investors right now. We will wait for the board to decide whose proposal will be sent to the EGM for vote. We would not like to waste time if our proposal is not being sent," Pai said in a phone interview. He further said that sending more than one proposal for shareholder vote may lead to an impasse as no clear winner may emerge in the absence of a promoter block. “It could delay things which the firm cannot afford at this point of time. We have submitted a comprehensive offer from our end," he said.
Last week, the Manipal-TPG Capital combine submitted a revised offer to the Fortis board to assuage investor concerns, offering a suitable deal structure and 21% higher valuation than the offer initially submitted on 27 March. Munjals and Burmans together have agreed to infuse ₹ 1,250 crore in the firm as well.
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Never miss a story! Stay connected and informed with Mint.
our App Now!!