Mumbai: Stressed assets funds have started eyeing Fortis Healthcare Ltd, anticipating that a long-drawn-out battle for the beleaguered hospital operator may worsen its financial condition and trigger the insolvency process.

With the sale of Fortis’s hospital assets expected to be delayed, Bain-Piramal Resurgence Fund and KKR & Co. have shown interest in Fortis, according to two people familiar with the developments.

“Some investors are already anticipating that the firm may be admitted for insolvency proceedings if there are more delays in arriving at a resolution plan," one of the two people said. This comes amid uncertainty over the sale of the firm’s hospital assets. In addition to legal and financial challenges, a series of counter-offers to the deal offered by TPG Capital and Manipal Hospitals is likely to delay deal closure and erode asset value.

Spokespeople for Bain Capital and KKR declined to comment. It could not be immediately ascertained if KKR is looking to invest through its asset reconstruction or private equity arm.

The TPG-Manipal combine has submitted a revised offer to the Fortis board after investors said the original offer undervalued Fortis’s assets. Malaysia’s IHH Healthcare Bhd also submitted a “non-binding" counter offer to the board, offering a marginal premium over Manipal’s bid.

Meanwhile, existing shareholders Sunil Kant Munjal of Hero Enterprise and Dabur’s Anand Burman and Mohit Burman have offered to invest Rs1,250 crore into Fortis. Although Manipal-TPG have the first right of refusal, they are unlikely to revise their offer, said the second of the two people cited earlier.

Spokespeople for TPG Capital and Manipal also declined to comment.

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