Fortis Healthcare has signed definitive agreements to provide healthcare services at a planned 400-plus-bed super speciality hospital in Ashok Vihar, New Delhi. The company informed stock exchanges of the development.
The agreements were executed by Fortis Hospotel Limited, a wholly owned subsidiary of Fortis Healthcare. The other party is Seth Sunder Lal Jain Charitable Eye Hospital. The filing refers to it as the SLJ Society.
Fortis Healthcare Ashok Vihar hospital deal
Under the Healthcare Services Agreement, the SLJ Society has granted Fortis Hospotel long-term exclusive rights to run specified inpatient services at the hospital. This includes access to equipment such as a Cath Lab, LINAC, PET-CT and a surgical robot. Fortis Hospotel will also bring in clinical staff for these services.
The agreement runs for 29 years. It carries an option for extension on terms to be mutually agreed later, the filing noted.
Ownership stays with the SLJ Society. The land, the building and the associated civil and medical infrastructure will belong to the society, not to Fortis. The society will also operate and manage the hospital.
Fortis Hospotel will pay a service fee to the society for the right to deliver healthcare services. The fee will be a percentage of the revenue the hospital generates. As part of the arrangement, Fortis Hospotel has also given an interest-free refundable security deposit to the society.
Fortis Healthcare to operate 400+ bed hospital
Separately, Fortis Hospotel has agreed to lend the SLJ Society up to Rs 567 crore. The money is meant for construction, upgradation and operation of the hospital.
The loan will be disbursed in tranches over the next three to four years, based on construction progress. The society has created security in favour of Fortis Hospotel for this loan. Fortis Hospotel will earn interest on it, as set out in the loan agreement. The company has said the transaction does not fall under related party dealings.
29-year Fortis Healthcare agreement
The hospital will come up on about 3.1 acres in Ashok Vihar, in north-west Delhi. It is expected to begin operations in three to four years, subject to regulatory approvals.
Planned specialities include oncology, neurosciences, cardiac sciences, gastroenterology, orthopaedics, renal sciences and transplants, along with multi-speciality robotic surgery. The hospital will also offer free inpatient and outpatient treatment to eligible patients under the Economically Weaker Sections category, as part of its regulatory and social obligations.
“The signing of the Healthcare Services Agreement with SLJ Society marks an important collaboration aimed at enhancing access to quality healthcare in North-West Delhi, an underserved micro-market characterised by a dense residential population. Under this arrangement, the hospital will be owned, operated and managed by SLJ Society, with Fortis providing healthcare services pursuant to the agreement,” Dr Ashutosh Raghuvanshi, managing director and chief executive officer of Fortis Healthcare, said.
About Fortis Healthcare
Fortis Healthcare is one of India’s leading integrated healthcare delivery companies. Its business spans hospitals, diagnostics and day care speciality facilities. The company currently operates 36 healthcare facilities, including joint ventures and operations and maintenance facilities, across 12 states. Its network includes more than 6,150 operational beds and close to 400 diagnostics labs.
Fortis Healthcare share price today
Fortis Healthcare’s share price has increased 1.49% as of early trade on September 17. The company’s share price has declined 3.04% in the past month. Furthermore, Fortis Healthcare’s share price has declined 8.34% in the last year.