Fortis Healthcare is finalising plans to raise a total of around Rs2,000 core through a rights-cum-warrants issue to its existing shareholders, to finance its acquisition and expansion plans.
The issue, which will consist of Rs1,000 crore in shares and Rs800 crore in warrants, is expected to be in the ratio of 1:2.
Fortis Healthcare said it is in advanced stages of finalising three acquisitions and these are expected to be concluded in the next couple of months.
Fortis is making a big push with plans to acquire majority stakes in hospitals and land acquisitions in strategic locations.
The hospitals chain is in talks with the Manipal Group for a 51-per cent stake. Fortis is said to have offered to acquire Manipal Group shares at an enterprise value of Rs900 crore against the asking price of Rs1,200 crore.
The Manipal Group is planning to raise around Rs500 crore through various routes, including an equity issue and private placement.
Fortis, which is also looking at acquiring a 26-per cent stake in Wockhardt Hospital, said initial discussions have been held with Wockhardt, but the issue is still in preliminary stages.
Sources said the rights issue would be between Rs850 crore and Rs1,000 crore at a 1:2 ratio. The warrant issue, to raise another Rs800 crore, would be linked to the rights issue. A final decision on this will be taken by the end of this week.
The board of Fortis Healthcare today approved the plan to raise funds via issue of equity shares with warrants on rights basis aggregating to Rs1,000 crore (excluding the value of warrants, as and when exercised), the company said in a release.
A committee has also been set up to decide on the modalities of the rights issue.
The board also approved the plan to increase the authorised share capital of the company from Rs400 crore to Rs678 crore through addition of 278 million equity shares of Rs10 each aggregating to Rs2,780 crore.
Fortis Healthcare has lined up a host of projects, including greenfield projects like the upcoming Medi City Project in Gurgoan.
Part of the funds will also be used to redeem preference shares, repay short term debt, upgrade existing facilities and tapping future investment opportunities.
The rights-cum-warrants issue exceeds the company's current market capitalisation of Rs1,590 crore.
Sources said the rights would be priced at a premium to the market price of Rs70.
While the stock market is not yet ready for large issues, reports quoting Fortis Healthcare managing director Shivinder Mohan Singh said the company was ''exploring various options of raising resources to fund its expansion plan''.
The company had mobilised Rs 496 crore in April 2007 through a public issue. The promoters currently own 74.4 per cent in Fortis Healthcare.
Fortis has 2,600 beds in 22 hospitals and plans to add 550 beds across the country, including 150 in Mumbai.