KUALA LUMPUR (Nov 11): IHH Healthcare Bhd said it is in discussion with the Securities and Exchange Board of India (SEBI) to determine the next steps to proceed with the mandatory open offer for an additional 26% stake in Fortis Healthcare Ltd.
Should IHH receive approval from the Indian market regulator, the integrated healthcare provider said it would be ready to undertake the offer in a timely manner.
"IHH Healthcare today re-affirms its commitment to the India healthcare sector and in supporting the growth of Fortis Healthcare as its largest shareholder with a 31.17% stake," IHH said in a statement filed with Bursa Malaysia on Friday (Nov 11).
Citing a written judgment issued by India's Suprement Court on Sept 22, the group noted that all prior status quo orders of the Delhi High Court now stand vacated.
Besides the Supreme Court's finding that IHH had not committed any wrongdoing relating to its investment in Fortis, there is currently no court order pending against the group in the proceedings, added IHH.
IHH had acquired the 31.17% stake in Fortis via a preferential allotment, and was mandated to make an open offer for the additional 26% stake.
IHH said Fortis was in operational and financial distress when IHH acquired the 31.17% stake, and the group had subsequently executed a 100-day turnaround plan, and also actively engaged with the Fortis board and management.
This, it added, had enabled the turnaround of Fortis, which now contributes positively to the group’s results. Additionally, IHH said Fortis has regained trust with its key stakeholders including patients, staff and investors.
“We certainly understand the frustration Fortis investors have felt over the past four years around the uncertainty of the IHH open offer," said IHH Healthcare managing director and chief executive officer Dr Kelvin Loh.
“With the recent Supreme Court judgement ruling making clear that we have conducted our investment in Fortis in a fair and transparent manner, we are discussing with SEBI to move ahead with the offer,” he said.
Loh said IHH was ready to proceed with the open offer as soon as possible should SEBI give its approval, considering that Fortis is IHH’s key growth platform in India.
“We are hopeful for a positive outcome so that we can explore more avenues to work with Fortis to accelerate its growth plans, together serving the healthcare needs of patients in India with care and excellence, while protecting the interests of our stakeholders,” he said.
In December 2018, India’s Supreme Court refused to lift a stay on IHH’s open offer for Fortis’ shares.
The court also sought a probe into the sale of shares in Fortis by lenders and transfer of money to RHT Health Trust on a petition filed by Japanese drug maker Daiichi Sankyo Co.
Daiichi had acquired pharmaceutical firm Ranbaxy in 2008 from Malvinder Singh and Shivinder Singh, who are also the former owners of Fortis. The Indian court also sentenced the Singh brothers to six months in jail on charges of contempt of court.
IHH’s share price finished three sen or 0.5% higher at RM6 on Friday, bringing the group a market capitalisation of RM52.84 billion. Year to date, the stock has fallen by 18.26%.