Fortis Healthcare Limited, a comprehensive healthcare services 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 approx ₹128 crores.
“The agreement is for a sale consideration of approx. INR 1,28,00,25,000 (Rupees One Hundred 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 deal involves the sale of the business operations of Fortis Malar Hospital, as well as the associated land and construction assets located in Gandhi Nagar, Adyar, Chennai. This all-cash transaction is expected to be completed by the end of January 2024, subject to 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 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 focus on strengthening its position in specific geographic clusters where it has a large presence.
“The proposed disposal of the Fortis Malar facility supports our focus on optimizing the current portfolio of our hospital assets with the goal of prioritizing our growth and expansion in other key markets and reallocating capital prudently,” said Dr. Ashutosh Raghuvanshi, Managing Director. & CEO, Fortis Healthcare Limited in a statement
“This is our second underperforming asset in the last 2 quarters and underscores our determination 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 clearance covers the out-patient department (OPD) and radiology business operations related to Fortis Malar Hospital, including the land and building where the hospital is situated. Additionally, several adjacent parcels of land 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. In addition, it has a new field hospital under development in the Tamil Nadu, Pondicherry region.
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Updated: 24 Nov 2023, 17:28 IST