Fortis Global Healthcare enters Sri Lanka

Fortis Global Healthcare Holdings Pte. Ltd, a company owned by Malvinder Mohan Singh and Shivinder Mohan Singh yesterday acquired 28.6% in Lanka Hospitals Corporation Ltd., (formerly Apollo Hospital) for Rs. 4 billion. This marks the entry of Fortis Global in one of Asia's fastest growing economies.

Fortis said the acquisition was in line with its vision of creating a Pan Asia healthcare platform and provides an access to one of the fastest growing economies in Asia.

Fortis’ latest acquisition, the fourth in five months, marks an important step in achieving the Singh family’s vision of creating a premier global healthcare group outside India. In the last four months, Fortis has acquired the largest private primary care company in Hong Kong, invested in the largest dental care company in Australia and announced the acquisition of a cancer speciality hospital project in Singapore.

Fortis Global Healthcare is spearheading the creation of a global integrated healthcare platform.

It intends to build and aggregate healthcare businesses and assets across all healthcare segments including diagnostics, primary care and hospitals. The objective is to create an integrated healthcare business, leveraging of synergies and scale, driven by quality medical professionals and infrastructure and providing patient-centric care and healing.   

In addition to Fortis Global Healthcare, the family also owns a majority stake in the Indian-listed Fortis Healthcare Limited, a leading hospital chain in India.

Fortis Global Healthcare Executive Chairman Malvinder Mohan Singh said: “Lanka Hospitals is the first step for Fortis Global to build its healthcare business interest in one of the fastest growing economies in Asia. It is one of the most advanced and comprehensive healthcare facility in Sri Lanka. We believe there are tremendous opportunities for the hospital’s expansion and we will support the company’s management in realising such growth.”

The execution on the Colombo Stock Exchange was achieved and completed through Religare Capital Markets joint-venture with Bartleet Mallory Stockbrokers Ltd, Sri Lanka, also the sole financial advisor to Fortis on the transaction.

Fortis Global Healthcare Holdings Pte. Ltd is committed to providing premier patient-centric healthcare across Asia and Australia. Fortis Global Healthcare is owned by the family of Malvinder Mohan Singh and Shivinder Mohan Singh (the "Promoter Family"). Fortis Global Healthcare's vision is to become a premier global integrated healthcare provider, spanning the healthcare spectrum, from hospitals to diagnostics, primary care and other healthcare segments.

The Promoter Family is also the owner of a majority stake in Fortis Healthcare Limited, which is separately listed and is a leading hospital operator in India. The Fortis Healthcare network’s capability covers multi-speciality hospitals and super-speciality centres that provide tertiary and quaternary healthcare to patients in the major medical specialities in India.

Lanka Hospitals is a renowned tertiary care healthcare delivery provider and currently one of the largest hospital groups in Sri Lanka. The hospital speacialises in cardiology and cardiac surgery, neuro-sciences, orthopedics and complex urology/nephrology procedures. The 350 bed hospital is majority owned by Sri Lanka Insurance Corporation Ltd, a Government of Sri Lanka company.

Distilleries toasts Rs. 3 b profit from sale; Share price up Rs. 8

Its discharge from Lanka Hospitals Corporation Ltd., (LHCL) has brought a whopping Rs. 3 billion profit for business tycoon Harry Jayawardena-controlled Distilleries Corporation of Sri Lanka (DCSL).

Analysts said that the cost of LHPL stake for DCSL was around Rs. 15 or Rs. 16 per share and the sale of 64.12 million shares at Rs. 62 per share reflects a profit of Rs. 3 billion. In DCSL’s 2009/10 accounts, the equity investment of 63.97 million shares in LHCL was stated at Rs. 959.6 million. On this stake the cost of per share was Rs. 15. The final block sold by DCSL included one million more shares.  

Investors toasted Distilleries for further infusion of cash with its share price closing at Rs. 177.20, up by Rs. 8.20. It peaked to a high of Rs. 178.90. In 2009/10 DCSL decided to treat LHCL as a long term investment from 2009/10 financial year despite a shareholding of 28.6% due to the absence of any representation on the Directorate of the said investee company. In 2008/9 it was treated as an associate.

LHCL saw 70.9 million of its shares traded generating a turnover of Rs. 4.3 billion. It closed at Rs. 51.80, down by 50 cents whilst it peaked to a high of Rs. 59.50. The DCSL stake was done via a crossing at Rs. 62 per share.

India based Fortis’ entry into Sri Lanka and LHCL is despite globally famous Apollo exiting a few years ago after building a state of the art healthcare facility. Industry sources said Apollo was exploring opportunities for a re-entry.

It was not clear whether Fortis would scout for a management deal of LHCL but market talk was that some understanding was possible between Fortis and the Lankan Government for the former to have invested in the stake.

Sri Lanka Insurance Corporation is the biggest shareholder in LHPL with General Fund owning 40.7% and Life Fund holding 14%. DCSL was the single largest private sector shareholder whilst Bank of Ceylon subsidiary Property Development Ltd., owning 9.53%.

Now led by a powerful and competent Board chaired by Defence Secretary Gotabaya Rajapaksa, LHCL in the 9 months ended 30 September, 2010, saw its revenue rise to Rs. 2.3 billion from Rs. 1.78 billion a year earlier. Net profit had swelled to Rs. 168.2 million from Rs. 30.9 million.

Rebound in investor interest boosts Bourse

The strategic deal on Lanka Hospitals Corporation (LHCL) as well as a rebound in overall investor confidence boosted the Colombo stock market yesterday.

The Rs. 4 billion deal on LHCL was largely responsible for Rs. 7.6 billion turnover, highest since late last year whilst Thursday’s heavyweights Ceylon Grain Elevators and Laugfs Gas figured among top traders yesterday as well. Grain saw 4.2 million of its shares traded for Rs. 860 million whilst Laugfs saw a second day of over 6 million shares changing hands for Rs. 343.7 million. Guardian Capital also accounted for Rs. 401.5 million turnover followed by 3.8 million Hemas Holdings shares trading for Rs. 179 million.

All Share Index gained by near 2% after slumping sharply on Thursday whilst Milanka Index gained by near 1%. Friday’s rally however failed to help Bourse end the week on a positive note as ASI and MPI finished off declining 2.29% and 1.95%, respectively over the previous week.