Fortis, Oscar Investments to buy 53% in Malar Hospitals

New Delhi Fortis Healthcare Ltd has announced that its subsidiary International Hospitals Ltd (IHL), together with Oscar Investments Ltd, has entered into an agreement for acquisition of about 53 per cent equity of the Chennai-based 180-bed Malar Hospitals Ltd. Oscar Investments is another Ranbaxy promoter group company.

As per the agreement, IHL will pay Rs 11.7 crore to buy 28 per cent equity in Malar Hospitals. The Rs 11.7 crore is for 39 lakh equity shares (at Rs 30 per share) from the promoters of Malar Hospitals.

Another 25 per cent preferential equity would be picked up by Ranbaxy through the two promoter group companies by settling the Rs 14-crore debt of Malar Hospitals. Of this, IHL would pick up 18 per cent preferential equity additionallyby paying Rs 10 crore debt of the hospital. Oscar Investments Ltd would pick seven per cent preferential equity by servicing Rs 4-crore debt.An additional open offer of around 20 per cent would be made in the due course. “We are acquiring the shares at a total enterprise value of Rs 42 crore. From the cost per bed perspective, it is a good deal as it works out to be Rs 32 lakh per bed,” said Mr Shivinder Mohan Singh, CEO and MD, Fortis Healthcare.

Fortis does not plan retrenchment of the hospital staff. It would go for management enhancement by appointing its own representative on the board of Malar Hospitals.

Malar Hospital was promoted in 1989 by a group of doctors headed by late Dr S. Ramamurthy and the hospital was set up in 1992.The scrip of Fortis Healthcare closed lower on Friday at Rs 85.25 against Thursday’s close of Rs 85.75 at the BSE. The scrip of Malar Hospitals closed higher at Rs 36 against Thursday’s close of Rs 31.90.