StanChart PE investing $13.5M more in Fortis Healthcare

Multispecialty hospital chain Fortis Healthcare Ltd is raising $13.5 million (Rs 80 crore) from Standard Chartered Private Equity as part of a series of fundraising initiatives spread over the past few months to generate resources for reducing debt. This will take StanChart PE’s holding in the healthcare firm to around 2.7 per cent and its total exposure to around $20 million.

The PE firm already invested a little over Rs 37 crore to buy shares of Fortis Healthcare in its institutional placement programme (IPP) two months ago. PremjiInvest and IFC also participated in the IPP.

In the latest deal, StanChart PE is picking up 8.85 million equity shares on a preferential basis, the company said in a stock exchange disclosure on Wednesday. This works out to be a fresh allotment at a price of over Rs 90 a share.

Fortis Healthcare scrip was trading at Rs 99 a share, down 0.45 per cent on the BSE in a weak Mumbai market on Wednesday.

For StanChart PE, this is only the second investment in the healthcare space and the first in the healthcare services domain in the country. Nine years ago, it had invested in Aurobindo Pharma through Merlion India Fund, a joint venture between Standard Chartered PE and Temasek, and exited the firm in 2009, as per VCCEdge, the financial research platform of VCCircle.

Fundraising by Fortis

In a parallel development, Fortis has said it is also raising $30 million more through foreign currency convertible bonds (FCCBs). The bonds will be listed on Singapore stock exchange and will be convertible at a listed price of Rs 99.09 per equity share. The company has fixed July 23, 2013, as the relevant date for future conversion of the FCCBs.

But the firm did not disclose whether it had already identified the investors for the FCCBs. Earlier, it had struck a parallel deal with IFC to raise $100 million through a mix of preferential allotment and FCCBs.

This development takes the total fresh fundraising to around $170 million over the past three months. Coupled with the asset sale in which it sold off two of its businesses in Australia and Vietnam for around $366 million in total, it has garnered over $530 million since the beginning of the year.

Part of this money will be used to reduce the debt pile-up on its balance sheet inherited from the large deal where it bought privately held international healthcare assets owned by its own promoters a couple of years ago.

Fortis had total debt of Rs 5,163.7 crore as of March 31, 2013. It had revenues of Rs 6,051 crore with net profit of Rs 500 crore in FY13.

(Edited by Sanghamitra Mandal)

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