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Rediff News  All News  » Business » Fortis rights' issue for Rs 1,000 cr in a month

Fortis rights' issue for Rs 1,000 cr in a month

July 01, 2009 10:36 IST

Fortis Healthcare, promoted by former Ranbaxy owners Malvinder Singh and Shivinder Singh, will raise Rs 1,000 crore (Rs 10 billion) through a rights issue by the first week of August, to fund its expansion plan.

"We have filed for the regulatory clearances from the Securities and Exchange Board of India for the issue and hope to exercise it in the last week of July or the first week of August," said Yogesh Sarin, chief financial officer and Bhavdeep Singh, chief executive officer.

In a telephonic interaction, they said Fortis was planning an aggressive expansion plan through acquisitions and erecting of new facilities. Fortis runs 28 hospitals with a capacity of close to 3,200 beds. It plans to increase this to 6,000 beds in about 40 hospitals by 2012, with an investment plan of over Rs 2,500 crore (Rs 25 billion).

The executives declined to say if the company was in advanced stages of negotiations with the Habil Khorakiwala-promoted Wockhardt Hospitals for buying two to three standalone hospitals or picking up a substantial stake in the chain, even up to 50 per cent.

Fortis had acquired Fortis Clinique Darné in February and acquired a 67 per cent stake in Fortis Hospital, Seshadripuram, Bangalore. It recently assumed the operation and management of the 280-bed super-specialty S L Raheja Hospital in Mumbai and took over the management contract in Modi Hospital in Kota, Rajasthan. Chennai-based Malar Hospital, the company's first network hospital in Southern India, posted a revenue growth of 83 per cent in 2008-09, at Rs 33.3 crore (Rs 333 million).

The executives said two-three new facilities are also nearing completion in north India.

On December 24, its Board of Directors had approved raising of funds through issue of equity shares with warrants on a right basis, aggregating to Rs 1,000 crore. The Board also approved increasing the authorised share capital from Rs 400 crore (Rs 4 billion) to Rs 678 crore (Rs 6.78 billion), by addition of 278 million equity shares of Rs 10, aggregating to Rs 278 crore (Rs 2.78 billion).

P B Jayakumar in Mumbai