Fortis re-convenes board meeting to consider quarterly results

By: | Published: June 27, 2018 5:22 AM

The quarterly results were deferred to June 11 following deliberations arising from an internal investigation.

Fortis has put forward certain conditions for the binding bids. (Reuters)

The board of Fortis Healthcare, which had earlier announced its meeting to consider the company’s quarterly as well as annual results on Monday, adjourned it and reconvened it on Tuesday, saying that the ongoing discussions on the annual accounts require further deliberations, according to an exchange filing. However, till the time of going to press no outcome was intimated to the exchanges.

The quarterly results were earlier set to be announced on May 30 but were deferred to June 11, following deliberations arising from an internal investigation conducted by Luthra and Luthra Law Offices. The law firm is reportedly investigating the diversion of funds by the former promoters of Fortis Healthcare.

On June 11, Fortis again deferred the approval of its financial results to June 25.

The cash-strapped company is currently in the process of finding a buyer. Four players — the Munjal-Burman consortium, IHH Healthcare of Malaysia, Radiant Life Care and the Manipal-TPG consortium — have been shortlisted for the process. The company recently extended the deadline for the submission of binding bids to June 28.

Fortis has put forward certain conditions for the binding bids that include a minimum investment of Rs 1,500 crore by way of preferential allotment, a plan for funding RHT Health Trust’s acquisition, with a long-stop date of September 30, a plan for providing exit to private equity investors of SRL and plans for the retention of current management and employees.

Earlier this month, the board of Fortis Healthcare had called off the demerger of its diagnostics business, including that of its majority-owned subsidiary SRL, into Fortis Malar Hospitals.
The proposal of demerger, which was announced in August 2016, was pending before the National Company Law Tribunal (NCLT).

Fortis said that the entire process was expected to take six-eight months but due to reasons beyond the company’s control, it has taken over 19 months and is still not complete.

According to the composite scheme of arrangement announced in August 2016, Fortis Malar’s hospital business was to be sold to Fortis Healthcare by way of a slump sale for a lump cash consideration of Rs43 crore. Upon the scheme becoming effective and after the receipt of requisite approvals, the diagnostics business of Fortis Healthcare, including that of SRL, was to be vested in Fortis Malar. The name of Fortis Malar was subsequently to be changed to SRL.

The company explained that during the 19 months, the healthcare sector has witnessed strong headwinds and the performance of the diagnostics business has not been optimum.

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