Embattled hospital chain Fortis Healthcare said it received an improved combined offer from the Munjals of Hero MotoCorp and the Burmans of Dabur Ltd.
Under the revised terms, the investors are willing to invest Rs 1,500 cr, against the Rs 1,250 cr promised earlier. The upfront investment has been increased to Rs 750 crores, while the investment of Rs 1,000 crores comes in at a higher price of Rs 161.60 per share.
The investors said they are seeking two board seats, “given the sizeable investment, and to generally act in the interest of stakeholders.”
“This should not be understood to mean that we are seeking to take over control/ management and / or direct the policy decisions of the company. We recommend that more independent directors be added to the Board of Directors,” they added.
The investors said they are revising their offer “on further reviewing the company’s financial condition from the information available in the public domain, recognizing its urgent need of funds and in order to stabilize the company’s operations”.
“We will invest an amount of (1) INR 500 crores through preferential issue of equity shares, and (ii) INR 1,000 crores through preferential issue of warrants; based on the current business and financial position of the Company as reflected in the Company’s various public filings, and taking into account information in the public domain.
“Hence, including the warrant subscription amount, our upfront investment into the Company will be INR 750 crores (i.e., INR 500 crores through preferential issue of equity shares plus INR 250 crores being an amount equivalent to 25% of the consideration for the warrants..” they said.
“The above investment shall be made immediately on acceptance of our Improved Offer, without due diligence,” they added. The earlier offer had mandated due diligence procedures.
Utilization of proceeds from the preferential issue of equity shares for INR 500 crores shall only be for the purposes of payment of employee dues, repayment of loans which have matured and payment to the most pressing creditors and lenders, they further added.
“This investment will provide the Company the much needed breathing space to explore all corporate finance options, i.e., rights issue, preferential issue, full/partial stake sale in SRL Limited (“SRL”) and/or raising debt at much better terms. Also, this will enable the Company to explore a combination of all the aforesaid options so as to enhance and maximize shareholder value,” the investors said.
The investors urged that their offer be put before shareholders “for their urgent consideration”.
“We believe that the Improved Offer is significantly better than any other publicly known options being explored by the Company,” they added.