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Manipal Health to acquire Fortis for Rs 6,500 crore: Report

Manipal Health to acquire Fortis for Rs 6,500 crore: Report

New Delhi: Manipal Health Enterprises (MHE), backed by TPG is close to acquiring Fortis Healthcare Ltd. and the deal is projected to be in the range of Rs 6,500 crore, according to a  recent report published in DNA. The daily also adds that the deal is expected to be official early next week with an announcement

Sources told DNA that Manipal will manage the hospital chain whereas TPG will invest in acquiring the network. TPG has been looking at the prospects on merging the two hospital chains i.e. Fortis Healthcare and Manipal Health Enterprises to create India’s largest medical services group and also to come at equal with its rival, Apollo Hospitals which has over 10,000 beds.

Fortis, when contacted by DNA said, “As a policy, we do not comment on market speculations. As shared earlier, the company is exploring options for fund raising.”

Fortis Healthcare on Thursday had reported a consolidated net loss of Rs 19.10 crore for the quarter ended December 2017 against a profit of Rs 453.29 crore in the year-ago period.

Read also: DISMAL report: Fortis reports net loss for Sept, Dec quarters

The company also reported its September quarter net loss at Rs 23.61 crore after it had sought a 15-day extension to declare earnings for the second and third quarter of the current financial year citing statutory auditors’ inability to complete the audit before the stipulated Board meeting.

Read also: Fortis Healthcare seeks 15-day extension to declare Q2, Q3 results

Although the company presented its earnings report, the auditor to Fortis Healthcare, Deloitte Haskins & Sells LLP, said it had not performed an audit.

It said the interim results have been reviewed by other auditors whose report has been furnished to them by the management.

“Because of the significance of the matters… relating to the ongoing investigations… we were not able to obtain sufficient appropriate evidence to form a conclusion on the statement,” it added.

Fortis Healthcare has also said it will hire an external legal firm to carry out an investigation into alleged siphoning of cash by the firm’s promoters, Malvinder Singh and Shivinder Singh.

Read also: Fortis to hire external legal firm to probe promoters fund misappropriation

The duo, who last month resigned from the board of the company, is alleged to have taken Rs 473 crore out of the hospital company they control without board approval. The alleged financial impropriety happened about a year ago.

Read also: Singh brothers resign from Fortis Healthcare board

In its second and third quarter earnings statement, Fortis said its Audit and Risk Management Committee “decided to carry out an independent investigation through an external legal firm”. “The scope of the investigation, inter alia, covers (a) inter-corporate deposits (ICDs) given by a wholly owned subsidiary of the company; (b) intra-group and related party transactions, including compliance with applicable laws and regulations,” it said.

Read also: Singh brothers took 78 million dollars out of Fortis: Report

Source: with inputs
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