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Fortis board approves demerger of its hospital biz

Prime News, National, Health, New Delhi, March 28:- Fortis Healthcare Ltd. (FHL) on Tuesday said its board has approved demerger of its hospitals business, which will be acquired by Manipal Hospitals and TPG Capital, along with the sale of 20 per cent stake in diagnostics chain SRL Ltd., in a Rs 3,900-crore deal.

In a late night announcement after a marathon meeting during the day, the healthcare chain said its board has given nod for the demerger of its hospital business into Manipal Hospital Enterprises Pvt Ltd.

“The board has also approved sale of its 20 per cent stake in SRL Ltd to Manipal Hospitals. The resultant entity Manipal Hospitals will be a publicly traded company listed on NSE and BSE. The remaining FHL will be an investment holding company with 36.6 per cent stake in SRL,” the company said in a statement.

The company further said, “As part of the proposed transaction, Dr Ranjan Pai and TPG will invest Rs 3,900 crore into Manipal Hospitals. The funds will be utilised by Manipal Hospitals to finance the acquisition of 50.9 per cent stake in SRL (20.0 per cent from FHL and 30.9 per cent from other investors for which discussions are currently underway).”

Manipal Hospitals, part of Manipal Education and Medical Group (MEMG), is owned by Dr Ranjan Pai and has been backed by TPG, a leading global alternative asset firm and experienced healthcare investor since 2015.

“In addition, the investment will support the proposed acquisition of hospital assets owned by RHT Health Trust (RHT) and the growth of the hospitals and the diagnostics businesses,” it added.

As part of the deal, when the demerger becomes effective, for every 100 shares of FHL held by a shareholder, the shareholder will receive 10.83 shares in Manipal Hospitals — the resultant combined hospitals business.

Commenting on the development, Fortis promoters Malvinder Singh and Shivinder SIngh said in a joint statement, the transaction “will unlock significant value for all stakeholders and will further accelerate and expand access to high quality healthcare services in India.” –(NGB, Inputs: Agencies)

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