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IHH makes revised, binding bid for immediate equity infusion into Fortis
ASIA'S largest private healthcare operator IHH Healthcare has ditched its non-binding offer for India's troubled Fortis Healthcare for a firm offer - sans any due diligence - for an immediate injection of 650 crore rupees (S$130 million) via a preferential allotment of equity at 160 rupees per share.
With the injection of primary equity, IHH is also seeking the right to appoint two directors on the Fortis board, said IHH in an announcement on Tuesday.
The binding commitment for the equity infusion is subject to Fortis agreeing to provide IHH with immediate access to carry out a legal and financial due diligence to evaluate a non-binding subsequent equity infusion of up to 3,350 crore rupees at a price not exceeding 160 rupees per share.
It is also subject to the end-use of the immediate equity infusion to be discussed with IHH's nominees on Fortis' board which will be applied primarily to pay off immediate dues to employees and creditors as well as to ease the debt servicing needs of India's second largest hospital chain, said IHH.
IHH said that it plans to wrap up the due diligence within three weeks of being granted access to Fortis' "data room fully populated with all required information".
For its revised proposal to be swiftly implemented, IHH said it will seek to discuss and agree on the terms of the definitive documents in relation to the subsequent equity infusion contemporaneously with the immediate infusion during an exclusivity period of four weeks commencing from the start of the due diligence exercise.
While Fortis must consider the revised offer in its entirety, the proposal for immediate equity infusion, said IHH, is not contingent on satisfactory completion of due diligence.
IHH has given Fortis until May 4 to respond to its latest offer that comes amid intensifying competition for control over the Indian hospital operator.
IHH shares closed unchanged at S$2.05 on Tuesday.