NE HEALTH BUREAU
CHENNAI, NOV 24
Fortis Healthcare Limited, a comprehensive healthcare service provider, on Friday, announced that it has finalized agreements for the sale of Fortis Malar Hospital in in Adyar, Chennai, and adjacent land parcels to MGM Healthcare Private Limited. The agreed sale consideration is approximately ₹128 crore.
- The all-cash deal is expected to be consummated by the end of January 2024
- The divestment is a component of Fortis’ continuous portfolio rationalization strategy, aiming to concentrate on strengthening its position in specific geographic clusters where it has a substantial presence
- This is our second under performing asset divestment in the last 2 quarters and emphasizes our resolve to improve our overall profitability and margins in the hospital segment: Dr Ashutosh Raghuvanshi, Managing Director & CEO, Fortis Healthcare Limited
“The agreement is for a sale consideration of approx. INR 1,28,00,25,000 (Rupees One hundred and twenty eight crores and twenty five thousand) (subject to customary closing adjustments as agreed in definitive agreements),” Fortis Healthcare said in an exchange filing.
The agreement involves the sale of Fortis Malar Hospital’s business operations, as well as the associated land and building assets located in Gandhi Nagar, Adyar, Chennai. This all-cash transaction is anticipated to be completed by the conclusion of January 2024, contingent upon specific conditions precedent and closing requirements outlined in the definitive agreements.
The successful execution of the deal is also dependent on obtaining approvals from shareholders of both Fortis Healthcare and Fortis Malar Hospital Limited, according to the joint statement.
It further stated that the divestment is a component of Fortis’ continuous portfolio rationalization strategy, aiming to concentrate on strengthening its position in specific geographic clusters where it has a substantial presence.
“The proposed divestment of the Fortis Malar facility underpins our focus on optimizing the current portfolio of our hospital assets with a view to prioritize our growth and expansion in other key markets and re-allocate capital judiciously,” said Dr Ashutosh Raghuvanshi, Managing Director & CEO, Fortis Healthcare Limited in a statement.
“This is our second under performing asset divestment in the last 2 quarters and emphasizes our resolve to improve our overall profitability and margins in the hospital segment,” he added.
The transaction comprises the following parts. The divestment of the business operations pertaining to Fortis Malar Hospital residing in the listed subsidiary of the company, Fortis Malar Hospitals Ltd, in which Fortis Healthcare owns a 62.7 per cent equity stake. The OPD and radio diagnostics business operations related to Malar Hospital (including the land and building) and the adjacent land parcels are also being divested by two wholly owned subsidiaries of Fortis Healthcare Ltd – Fortis Health Management Ltd and Hospitalia Eastern Private Ltd to MGM.
MGM Healthcare Private Limited stands as a rapidly expanding quaternary care provider in South India, offering advanced healthcare services. The organization currently manages two quaternary care hospitals with a combined bed capacity of 600 beds. Furthermore, it has a new greenfield hospital in development in the Tamil Nadu, Pondicherry region.
