Will use rights issue money for acquisition, debt: Fortis

The board of Fortis Healthcare met on August 10 to finalise terms of the Rs 1,000-crore rights issue that it had approved earlier.

In an exclusive interview to CNBC-TV18, Managing Director Shivinder Mohan Singh said the rights issue money would be used for three purposes: debt write-off, potential acquisitions and a Gurgaon project that the company has.

Here is a verbatim transcript of Shivinder Mohan Singh’s exclusive interview on CNBC-TV18. Also watch the accompanying video.

Q: Let’s start with the rights issue and the sum you have raised right now. Why do you need this sum of money? What are the expansion plans that you are looking at currently?

A: There are three or four things that we are talking about with the rights issue money. The first is we have already talked about: our Medicity project in Gurgaon. So, we are taking a certain amount of equity off that. We are taking that up through the rights issue. So, that is about Rs 200 crore from that perspective.

We are looking at offloading some of the short-term debt and the preference capital that we have in the company. We want to write that back out. So, that is another major chunk of that. The third is that we are keeping some money available for acquisitions that may come going forward. We have a couple of plans on that line. So, we have a couple of hundred crores for that as well.

So, it is basically three large buckets. One is on Gurgaon, second on debt and preference capital and the third is a kitty for acquisitions.

Q: Are you also looking at infusion of promoter cash into the company at this point?

A: Through the rights issue the promoters would also be infusing in capital. It is a rights issue, so, we have a majority stock of the company. So, we will also be putting in capital through that. As also the fact that the promoters had underwritten the rights issue. So, if there is any gap between what the shareholders whether they decide to invest or not, the promoters will put in the balance if required.

Q: Are you still in the race to acquire Wockhardt Hospitals?

A: I don’t believe there is a race on. So, I don’t know if I can answer that question.