Fortis Healthcare, the second-largest Indian hospital chain by revenues, has redeemed $100 million worth of outstanding foreign currency convertible Bonds (FCCBs) listed on the Luxembourg Stock Exchange, a report said.
The report by VCCircle said these FCCBs were purchased by Singapore sovereign wealth fund GIC in May 2010. These bonds were optionally convertible at Rs 167 ($2.63) per share with a yield-to-maturity of 5.537 per cent per annum.
As of May 2015, Fortis maintains a market capitalisation of $1.23 billion, according to a Reuters quote.
The report further added that $105.67 million was the payout of these FCCBs being redeemed, and this included a redemption premium of around $3.17 million and interest payment of $2.5 million for the preceding six months period, which ended on May 21, 2015. Fortis conducted the redemption from existing cash proceeds.
Post-redemption of the FCCBs, Fortis net debt to equity ratio is now estimated to be less than 0.15x, as against 0.27x on December 31, 2014. Gagandeep Singh Bedi, CFO of Fortis Healthcare, said, “The FCCB redemption further strengthens our balance sheet giving us greater flexibility to pursue our agreed strategy.”
GIC had planned to invest an additional $59.8 million through a preferential share allotment in 2010 but had deferred these plans and indefinitely suspended the initiative to increase its investment in Fortis.
Fortis Healthcare had issued FCCBs to finance its acquisition of Singapore-based Parkway Pantai but eventually divested its stake in Parkway to Malaysian sovereign wealth fund Khazanah. Since its acquisition, Parkway has contributed to the growth and emergence of pan-Asian private healthcare firm IHH Healthcare, a portfolio company of Khazanah.
In the aftermath of this, Fortis disengaged from further international expansion and has seemingly sought to consolidate its position in the Indian market. Instead, it has gradually divested its Southeast Asian and Australian assets. Most recently, Fortis sold Singapore-based healthcare services unit RadLink-Asia to Fullerton Healthcare Group for S$111 million ($83 million).