Fosun offers to invest up to US$350m in Fortis
> Chinese company is fourth suitor for India’s cash-strapped healthcare provider
NEW DELHI: India’s cash-strapped Fortis Healthcare Ltd said Fosun International Ltd has offered to invest up to US$350 million (RM1.36 billion) making the Chinese conglomerate the fourth suitor aiming to benefit from a government push for better healthcare.
The unsolicited non-binding offer follows one other offer of investment from local businesses and separate takeover bids from unlisted Manipal Health Enterprises Ltd and Malaysia’s IHH Healthcare Bhd.
Interest in Fortis comes as the government works to provide health insurance for about half of India’s 1.3 billion population, which analysts expect will encourage more people to use healthcare services.
Fortis runs about 30 hospitals, having grown rapidly with demand created by an over-stretched public healthcare system.
But it has lately struggled with insufficient cash and increased debt, while regulators investigate allegations that its founders took funds without board approval. The founders deny wrongdoing.
In a regulatory filing late on Tuesday, Fortis said it had received a letter from Fosun in which the Chinese conglomerate offered up to 156 rupees per Fortis share in return for less than a quarter of the firm.
Fosun is one of China’s most acquisitive companies. Last month it said it aimed to increase investment in India, and last year announced it would buy three-quarters of India’s Gland Pharma. The conglomerate did not immediately respond to a Reuters request for comment.
“We are aware of the company’s near-term cash requirements, strategic plans for consolidation of its real estate assets, and various alternative proposals put forth to the board’s consideration,” Fosun said in the letter.
The letter showed Fosun also offered a cash infusion of 1 billion rupees (RM59 million) within the next 45 days, including the option of immediately subscribing to Fortis’ convertible bonds, provided Fortis grants 30 days of exclusivity to negotiate the investment proposal.
Fosun said its overall investment proposal will best meet Fortis’ immediate short and long-term needs. – Reuters