Fortis in talks to sell Hong Kong and Vietnam assets to raise US $ 400mn
India’s largest hospital chain, Fortis Healthcare, may sell its Vietnam and Hong Kong arms for US $ 380-400 million, or around Rs.2,100 crore, two persons familiar with the development said.
“Fortis has received an unsolicited bid of US $ 80 million from Singapore-based Richard Chandler Corporation for its 65 percent stake in Fortis Hoan My Corporation (the Vietnamese unit),” one of the two persons said. “The transaction is in the final stage as the two sides have already reached an understanding and a deal is likely to be announced shortly.”
Only last month, the hospital chain, owned by billionaire brothers Malvinder Singh and Shivinder Singh, completed the sale of its Australian subsidiary Dental Corporation for around US $ 263 million.
“The company has started the process of divesting its primary care chain in Hong Kong, Quality Healthcare and some leading hospital chains and financial investors have shown keen interest in the asset. Investment bank JPMorgan is the lead advisor to the deal,” said the other person familiar with the proposed transaction.
“The deal for Quality Healthcare is expected to be valued between US $ 280 and US $ 320 million,” said one of the persons.
The advisors are expected to start the process of inviting bids shortly.
“After the divestment of its assets in Vietnam and Hong Kong, Fortis Healthcare, which had invested about US $ 665 million in September 2011 for its foray into international markets, will recover its entire investment while retaining its presence in four countries - Singapore, Mauritius, Sri Lanka and Dubai,” said a top banker familiar with the development.
Spokespersons of For tis Healthcare and JPMorgan declined comment. “We cannot comment on market speculation,” the Fortis spokesperson said. Richard Chandler Corporation did not respond to queries.
Richard Chandler, a Singaporebased international business group founded by New Zealand-born entrepreneur Richard F. Chandler, has interests in the energy, consumer, financial services and healthcare sectors with operations in Asia, Africa, the Americas, Europe and the Middle-East. It has portfolio investments in some Indian banks such as SBI, HDFC Bank, ICICI Bank and Yes Bank.
In all, Fortis Healthcare plans to raise about US $ 800 million (Rs.4,536 cr) from asset sales as well as issue of equity in the first six months of the current fiscal ending September 2013. The fund-raisings are intended to cut its debt burden of Rs.7, 000 crore.