Fortis redeems FCCBs worth $100m held by GIC: Report

Fortis hospital in India

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).

Related Stories: Fortis to sell RadLink unit in Singapore for $83.5m to Fullerton Healthcare

Malaysia’s IHH Healthcare acquires 51% in Continental Hospitals

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.