Leading hospital group Fortis Healthcare Ltd has firmed up its fund-raising plans as it prepares for a possible takeover battle for Singapore-based Parkway Holdings. The board of Malvinder and Shivinder Singh-controlled healthcare major informed the exchanges today that it plans to raise an aggregate amount of up to Rs 2,750 crore ($575 million) through issue of fresh securities. The board has also approved increasing the borrowing limit to Rs 6,000 crore ($1.3 billion).
This development comes after Malaysia's sovereign fund Khazanah launched an $835-million offer to gain control of Parkway Holdings two weeks ago. Khazanah, which already owns around a 24% stake, plans to increase its holding to 51.5% through the offer. Fortis bought a 23.9% stake in Parkway from US buyout firm TPG for $685 million in March and has since then increased it to 25.37% through market purchases.
Khazanah said, the group plans to consolidate its existing stakes in Parkway, Pantai, Apollo and IMU to become Asia's premium regional healthcare platform.
Fortis has also raised Rs 380 crore ($81 million) from an arm of GIC Special Investments Pte Ltd, the private equity arm of Singapore Government state investment firm. It also raised $100 million through the issuance of foreign currency convertible bonds (FCCBs) to fund the Parkway stake purchase.
The acquisition of Parkway by Fortis is the largest overseas acquisition by an Indian company in the healthcare sector and created Asia’s largest healthcare firm. After the deal, Malvinder Singh moved to Singapore to become chairman of Parkway and drive its international expansion. The acquisition of a strategic stake in Parkway Holdings Limited increased Fortis' network, now with a presence in Brunei, China, India, Malaysia, Mauritius, Singapore and the UAE.
This move was in line with similar inorganic expansion back home where Fortis acquired Greenfield Hospital Division of Wockhardt Hospitals that gave it ten hospitals of Wockhardt for Rs 909 crore in August this year. The acquisition was part-funded by a rights issue of Rs 997 crore, internal accrual and debt.