Standard Chartered PE raises stake in Fortis Healthcare
Standard Chartered Private Equity (SCPE) has invested a further INR370.3 million ($5.7 million) to buy preferential shares in India’s Fortis Healthcare. It brings SCPE’s total investment into the company to approximately INR2.5 billion.
According to a regulatory filing, Fortis allotted 3.7 million shares to Standard Chartered Private Equity (Mauritius) III at an issue price of INR99.09 per share. Share of Fortis closed at INR95.70 on the day.
The company said the deal concluded its fundraising initiatives for the year, which have aggregated to INR10.4 billion. Fortis has been taking measures to reduce its total debt, which stood at INR51.6 billion as of March. It had revenues of INR60.5 billion in the 2013 financial year, with a net profit of INR4.9 billion.
Fortis spans primary care, diagnostics, day care specialty and hospitals. It currently operates in India, Hong Kong, Singapore, Dubai, Mauritius and Sri Lanka with 65 healthcare facilities (including projects under development), over 600 primary care centers, more than 240 diagnostic centers and a team strength of over 18,000 people.
SCPE previously invested $13.5 million in the hospital chain through a preferential allotment of 8.85 million shares. It is also the key investor in the public issue of Fortis foreign currency convertible bonds (FCCBs) listed on the Singapore Stock Exchange in July 2013, with its $30 million investment.
In May it acquired shares in an Institutional Placement Programme (IPP) for INR370 million and has used around INR470 million to buy Fortis shares in the open market.
Fortis has cumulatively raised INR10.4 billion this year, through equity and equity-linked instruments. The International Finance Corporation (IFC) has so far invested approximately INR5.7 billion in Fortis through the IPP in May 2013, the preferential allotment of equity shares and a subscription to the FCCB issue.
Three of the chain's hospitals - in Gurgaon, Chennai and Ludhiana - are expected to be operational soon, and Fortis will add around 1,500 beds to the current capacity of 4,000. It follows an asset-light model where investments into infrastructure, land and civil works are carried out by the Religare Health Trust.
The company's net debt-to-equity ratio was at 0.7x as of June 30, down from 1.6x on September 30, 2012. The target ratio is no more than 0.5x.
The healthcare chain has divested its overseas businesses in Australia and Vietnam this year, while the sale of its stake in Hong Kong's Quality Healthcare Medical Services is in process.
The company expects its portfolio to continue with 80% India business and 20% international, a change from the 50-50 spilt a while ago. It retains its units in Singapore, Mauritius, Sri Lanka and Dubai.
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