New Delhi/Chennai: The Fortis group is all set to grab 48% stake in Chennai-based Malar Hospital for about Rs 42 crore. This marks the group’s initial entry into South Indian market.

In north region, Fortis already has a network of 12 hospitals and 16 satellite and heart command centres.

The acquirement will be done through International Hospital Ltd (IHL), a wholly-owned subsidiary of Fortis, together with Ranbaxy group company Oscar Investments. In the first portion, International Hospital Ltd will acquire the promoters holding of 28 at Rs 30 each share.

The company’s overall equity is Rs 1.39 crore. A doctor’s group led by late Dr. S Ramamurthy promoted the hospital in 1989, and now his wife runs the hospital.

Shivinder Mohan Singh CEO and MD, Fortis Healthcare told, “Malar Hospital is well established in Chennai with strong brand equity and is centrally located. We will follow the same strategy in Chennai of setting up hubs and spoke hospitals as we have done in Delhi.”

Moreover, International Hospital together with Oscar Investments will put in Rs 14 crore as loaning amount, which will be transformed into 25 per cent equity, subject to authorization by Malar stockholders. OIL will get hold of about 7 per cent, whereas International hospital will get 18 per cent.

Post conversion, International Hospital will hold 23% and an extra 18% equity, and an additional 7% held by Oil, taking up the entire equity to about 48%.

According to Mr. Shavinder, the acquirement will be financed through internal accruements and debt.

As per the Securities and Excahnge Board of India (SEBI) guiding principle, IHL and OIL would make an open offer to the stockholders of Malar Hospitals.

The group is likely to obtain a majority stake in the company after the open offer. Malar Hospital is a multi-specialty hospital concentrating on comprehensive medical care.

Fortis is planning to raise its capacity to 40 hospitals and 6,000 beds by next three years, from the subsisting 12 hospitals and 2200 beds.