Fortis raises ₹150 crore debt in bid to stave off insolvency
NEW DELHI: Fortis Healthcare Ltd, which is weighing multiple takeover offers for its assets, has got a ₹150 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 insolvency, 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 ₹37 crore in the quarter ended March 31, 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 a response.
Meanwhile, Malaysian firm IHH Healthcare Bhd, which had submitted a non-binding offer to acquire hospital assets of Fortis, on Monday said 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 of the two people 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”.