Fortis Healthcare divests Fortis Malar Hospital for ₹128 crore; Details here

Fortis Healthcare Limited, a comprehensive healthcare service provider, on Friday,  announced that it has finalized agreements for the sale of Fortis Malar Hospital in Chennai to MGM Healthcare Private Limited. The agreed sale consideration is approximately ₹128 crore.

“The agreement is for a sale consideration of approx. INR 1,28,00,25,000 (Rupees One hundred and twenty eight crores and twenty five thousand) (subject to customary closing adjustments as agreed in definitive agreements),” Fortis Healthcare said in an exchange filing.

The agreement involves the sale of Fortis Malar Hospital’s business operations, as well as the associated land and building assets located in Gandhi Nagar, Adyar, Chennai. This all-cash transaction is anticipated to be completed by the conclusion of January 2024, contingent upon specific conditions precedent and closing requirements outlined in the definitive agreements. 

The successful execution of the deal is also dependent on obtaining approvals from shareholders of both Fortis Healthcare and Fortis Malar Hospitals Limited, according to the joint statement.

It further stated that the divestment is a component of Fortis’ continuous portfolio rationalization strategy, aiming to concentrate on strengthening its position in specific geographic clusters where it has a substantial presence.

 “The proposed divestment of the Fortis Malar facility underpins our focus on optimizing the current portfolio of our hospital assets with a view to prioritize our growth and expansion in other key markets and re-allocate capital judiciously,” said Dr. Ashutosh Raghuvanshi, Managing Director & CEO, Fortis Healthcare Limited in a statement

“This is our second under performing asset divestment in the last 2 quarters and emphasizes our resolve to improve our overall profitability and margins in the hospital segment,” he added.

The transaction involves the sale of business operations associated with Fortis Malar Hospital, located within the listed subsidiary Fortis Malar Hospitals Limited. Fortis Healthcare holds a 62.7 percent equity stake in this subsidiary. The divestment encompasses the outpatient department (OPD) and radiology business operations linked to Fortis Malar Hospital, including the land and building where the hospital is situated. Additionally, multiple adjacent land parcels related to the property are part of the transaction.

MGM Healthcare Private Limited stands as a rapidly expanding quaternary care provider in South India, offering advanced healthcare services. The organization currently manages two quaternary care hospitals with a combined bed capacity of 600 beds. Furthermore, it has a new greenfield hospital in development in the Tamil Nadu, Pondicherry region.

Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Updated: 24 Nov 2023, 05:28 PM IST