首頁 » » Sunil Munjal calls other Fortis offers as \"restructuring exercise\" with no instant benefit to company/shareholders​

Sunil Munjal calls other Fortis offers as \"restructuring exercise\" with no instant benefit to company/shareholders​

作者:Charlotte 發表日期:2018-04-16 02:38:06 分類:

Sunil Munjal of Hero Enterprise, who has jumped into the fray in the battle to take control over Fortis Healthcare along with Burman family of Dabur, said there is "absolutely no comparison" between his offer and the ones made by other parties including Manipal-TPG consortium and IHH Healthcare.

Munjal and Burmans have jointly proposed to invest a total of Rs 1,250 crore upfront and the balance Rs 750 crore over a period of time to meet the immediate cash requirements of Fortis and help stabilize its operations.

Munjal and Burmans hold around 3 per cent in Fortis.

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Munjal, in an exclusive interview to Moneycontrol, called the other two offers as restructuring exercise, and said they don't either instantly address the problem of liquidity shortage faced by the company or benefit the shareholders.

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Munjal added that the proposed investment in Fortis is done with intention to create long-term value and stability for the shareholders and company - and not for the purpose of transaction or speculation.

What's the rationale behind the proposed offer?

Health is an area which is in crying need for India as a nation. At this point of time, we need to both increase the capacity and quality of healthcare. What we have is far far behind the actual needs of the nation. Fortis is second largest quality healthcare system in the country, which at this moment is suffering due to liquidity and host of other issues. Both Burman family and we are already the shareholders of Fortis. We felt the company both needs and deserves some help and support, if it gets that, it actually has very good potential to grow, bring value to the shareholders, provide better service to patients, get better doctors to work in, the overall system gets benefit, which is the reason why we have made an offer which was very straight and simple. The other offers they have require the structures to be changed and require a whole lot of regulatory clearances.

There are investigations of SEBI and SFIO going on against Fortis and the company was also dragged into the Rs 3500 crore arbitration case between the erstwhile promoters Singh brothers and Daiichi Sankyo - what made you proceed with the offer even while there is risk of running into potential legal liabilities?

As you can imagine we have obviously take some (legal) advise. The Daiichi issue was addressed directly at the former promoters and since they do not really have much ownership here. There ownership in the entity is just under one percent now - that overhang is no longer there on the company. And the investigations which are on - in some ways actually help in identification of the problem areas. It obviously doesn't affect any new shareholders coming in. It just shows up what are the areas that need to tackled and fixed. The challenge that the company has is on lack of liquidity or money which is short in supply. That is something which we are addressing straight off.

Some of the hospital assets of the Fortis are with Religare Health Trust (RHT). Your offer doesn't talk about what to do with these assets?

Whatever one can see - that's a purely a financial arrangement. It's an entity that's listed on Singapore Stock Exchange, so Singapore Stock Exchange is very very strict on compliance. Whatever the structure is, it will be compliant. That gives us the comfort.

Also whatever one can read while it helps the company here save some money and interest - but at the same time the company has been sending out part of its margin every year to the Trust. It's a top up as to spending money to acquire the assets and seeing the cost of that money. On the alternative side you end up improving your margin and bottomline here (continuing with present arrangement). It's not a very complex decision to make by the way.

Now if your investment of Rs 1,250 crore goes through, you'll acquire 16-17 percent stake., in addition to existing 3 percent. Any possibility of acquiring the remaing 5-6 percent and make an open offer to get controlling stake?

We are not going to talk about what we are going to do in the future. But what we are doing now is what we have announced. That's the plan for the moment.

What is your strategy with this investment? Are you trying to profit out of this transaction once things stabilise?

We only do long term investments. As a philosophy all our investments are long term whatever we have done so far. We don't do transactional stuff, we don't do speculative stuff, we do things where we believe there is long term value, stability,  benefit to be had.

One of the competitors, IHH Healthcare, has offered Rs 160 per share, do you think you may have to revise your offer?

There is absolutely no comparison between the offers. I don't mean to run anybody down, because they are outstanding wonderful companies. But what they are offering is restructuring exercise which in India takes anywhere from 8-9 months to 12-18 months.

There is no money coming into the company or going to shareholders. How do the entire system benefit I am not quite clear. Of course any change will benefit this entity. We are talking about the benefit being here today and at this value.

Are you talking to other shareholders to get this deal done?

We will wait to hear back from the Board. Once they confirm, of course we'll like to talk to them. I would imagine the board meet to happen soon.

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