New Delhi: IHH Healthcare commitment to Fortis Healthcare Ltd remains "unchanged" and "unwavering", said chief executive officer Tan See Leng on Friday, despite several hurdles that have come in the way of the Malaysian firm's India investment.
“Regardless of the final decision, the efforts by IHH in restoring the performance of Fortis Healthcare, continues unabated," said See Leng said in a video interaction with mediapersons.
In July 2018, IHH Healthcare won a multi-pronged bidding war to acquire Fortis and completed the deal in November—buying a 31.1% stake through preferential allotment of shares. To stabilize the business, IHH immediately infused ₹4,000 crore in Fortis, but an addtional ₹3,400 crore put in an escrow account to initiate an open offer is stuck due to a Supreme Court-ordered status quo on the IHH-Fortis deal.
“We at IHH fully respect and (have) highest regard for the Indian judiciary process...we certainly hope India will support foreign investors as well as minority shareholders in Fortis to have their chance to realise the value of their investment through this open offer, which uptil now has been delayed," See Leng said.
The Supreme Court had in December put on hold the Fortis-IHH deal, ordering a status quo with regard to sale following a contempt plea moved by Japanese drug maker Daiichi Sankyo Co. Ltd against the Singh brothers, the former promoters of Fortis.
Maintaining that the dispute between Malvinder and Shivinder Singh, and Daiichi Sankyo does not involve Fortis, See Leng said: “I want to emphasise that IHH and Fortis aren't involved in the dispute between Daiichi and the Singh brothers. The judicial proceedings solely pertain to Singh brothers, who hold a very neglihible shareholding, less than 0.2%, and they no longer have any roles in Fortis, RHT (Religare Health Trust) or any of their operations," he added.
Claiming that IHH's 100-day turnaround plan for Fortis has started reaping results, See Leng said his firm is taking firm and proactive steps to ensure that the financial health of the hospital firm continues to improve.
“Fortis’ financial performance in the last quarter showed steady improvement; the hospital business' operating ebitda margin has seen an upward momentum over the last three quarters. The net profit for Q3FY19 was primarily impacted by exceptional losses which are not representative of core operational performance," said See Leng.
"We are taking firm and proactive steps at Fortis that are already reaping results."
Seeking to allay concerns that the buyback of RHT assets benefited the Singh brothers as well, See Leng said: “I hope to settle the record, once for all, that to the best of our knowledge, in RHT they do not have any role to play."
The acquisition of RHT assets will improve Fortis' cash flows, said Fortis vice chairman Shirish Moreshwar Apte. “The RHT acquisition strengthens the balance sheet of Fortis and stops the payment of ₹300 crore per year to RHT and multiple shareholders in Singapore. That will change the value of balance sheet and improve the cash flows of Fortis, thereby increasing the debt capacity of Fortis in India."