Parkway stake makes Fortis largest Asian hospital chain

New Delhi, March 12 (IANS) Fortis Healthcare founded by brothers Malvinder and Shivinder Mohan Singh has become the largest hospital chain in Asia after buying 24-percent stake in Singapore's Parkway Holdings for $685.3 million.

The company entered into a definitive agreement with TGP Capital, a leading private equity firm based out of the US, to acquire its stake in Parkway and will have four of its directors on the Singapore-based healthcare chain's board.

The deal will be part financed with the proceeds from the $250 million rights issue that was floated in October last year, internal accruals and short-term loans, Shivinder Singh told reporters here.

"Singapore regulatory approvals are expected in a week to 10 days."

According to him, Parkway has 16 hospitals with as many as 3,400 beds in six countries -- Singapore, Malaysia, Brunei, India, China and the UAE -- and will enlarge the hospital network of Fortis to over 10,000 beds.

"Parkway is a strong brand in the markets it operates. This brand will continue," he said, as the shares of Fortis Healthcare climbed over 5 percent to a 52-week high of Rs.187.5 before settling lower at Rs.182.3.

The deal will also give Fortis a stake in another subsidiary of Parkway, which has a market capitalisation of $564 million, and invests in real estate and related assets that are deployed primarily for the healthcare sector.

Together, Fortis and Parkway will also become the largest hospital chain in Asia - a distinction that was earlier held by Dr. Prathap C. Reddy's Apollo that has a network of 46 hospitals with 8,065 beds.

Incidentally, Parkway and Apollo have a joint venture in India, that operates a 325-bed multi-speciality hospital in Kolkata, called Apollo Gleneagles Hospital, spread over a lush landscape of 8.5 acres.

"It is a good joint venture. It is doing well. I see no reason why it should not continue," Fortis chairman Malvinder Singh told reporters here, soon after his return from Singapore where the deal was struck Thursday.

"The Parkway acquisition will significantly expand our footprint across the region and place us strategically for geographical and clinical leadership in Asia -- a big step closer to our vision of establishing a global healthcare delivery network," he said.

"The next phase of our growth will be to look at other countries outside Asia," said Malvinder Singh who will be chairman of the acquired company and relocate to Singapore along with another Fortis board member Balinder Dhillon.

His younger brother will continue to head the healthcare business in India.

For his family, the deal comes after its acquisition of 10 hospitals from Wockhardt in India for $180 million and the sale of the family's 34.8-percent stake in pharmaceuticals major Ranbaxy Laboratories to Japan's Daiichi Sankyo for $2.4 billion.

Religare Capital, another company in the group, is the sole advisor for the Parkway deal.

Parkway had earned nearly $700 million in revenues during 2008, making a net profit of nearly $130 million. The company's current management team will continue to look after day-to-day operations.