Hospital chain operator Fortis Healthcare Ltd. plans to raise funds worth Rs 1,000 crore through issue of equity shares with warrants on right basis. Fortis is promoted by the Singh family, also the former promoters of Ranbaxy Laboratories. The Singhs earlier this year sold their stake in Ranbaxy to Japan's Daiichi Sankyo for Rs 9,576 crore. The announcements for rights issue of Fortis comes after Rs 1,800 crore rights issue of Religare Enterprises, the financial services firm promoted by Singhs.
The proceeds of the rights issue would be used mainly to fund greenfield projects, including the upcoming Medi-City project in Gurgaon as well as for tapping future investment opportunities. Redemption of preference shares, repayment of short term debts and up gradation of existing facilities would also be done through the proceeds of the rights issue.
When Religare rights issue was announced, the promoters gave a commitment to subscribe for the unsubscribed portion. However no such commitment has been given for Fortis yet, and other details like price and timing of the rights issue is also yet to come. The rights issue will be a way for the cash rich Singhs to invest in their growing healthcare empire.
In addition to this, the board also approved the company's plans to increase the authorised share capital of the company from Rs 400 crore to Rs 678 crore. The company intends to increase its authorised share capital by adding 278 million equity shares of Rs 10 each aggregating to Rs 278 crore.
Fortis has been aggressively expanding its hospital chain and pharma retail chain empire. It acquired two pharma chains recently- Delhi based CRS health and Bangalore based LifeKen Medicines. It has also been looking to acquire hospitals. It was recently reported that the firm is in talks to acquire stakes in Manipal and Wockhardt Hospitals. Fortis has raised private equity funding of around $27 million from London-based Trinity Capital.
Fortis Healthcare was incorporated in the year 1996. Based in New Delhi, Fortis had acquired Escorts Heart Institute and Research Center in 2005. The healthcare major operates in 8 cities with a network of 23 hospitals including 8 satellite/heart command centers.