KUALA LUMPUR (Aug 4): IHH Healthcare Bhd’s largest shareholder Mitsui and Co Ltd said IHH will continue to execute the turnaround plan for India-based Fortis Healthcare Ltd and that IHH hopes to deliver a significant quantitative and qualitative improvement in the provision of healthcare services in the South Asian country.
Moneycontrol quoted Mitsui executive managing officer and country chairperson in India Koji Nagatomi as saying hospital operator IHH has grown successfully across Asia and the group is therefore confident that it will grow its healthcare business in India.
“Although IHH is an independent management company, through board representation, Mitsui acts as a steward and provides strategic guidance to IHH, enabling us to drive the growth of the largest hospital group in Asia.
“We view the Indian healthcare market as highly attractive — particularly the private hospital sector, which accounts for 80% of the total healthcare market in India — due to its significant growth rate of around 16-17% (compound annual growth rate (CAGR)),” Nagatomi said.
Moneycontrol reported that IHH is one of the larger investors in the Indian private hospital space, with controlling stakes in Global Hospitals and Continental Hospitals.
It was reported that the acquisition of Fortis, however, has been IHH's single biggest bet in India
"IHH acquired a 31% stake in Fortis in August 2018 by paying US$1.1 billion (about RM4.64 billion) in a bidding process overseen by an independent board. However, it couldn't make progress on its mandatory open offer to acquire a 26% stake due to a Supreme Court stay order.
"The apex court blocked the open offer on a plea filed by Japanese drugmaker Daiichi Sankyo, which is trying to enforce a Rs 3,500 crore arbitration award it won in a Singapore tribunal against Fortis’ erstwhile promoters, brothers Malvinder Singh and Shivinder Singh,” Moneycontrol reported.
On reports about Mitsui reaching out to Daiichi Sankyo to insulate IHH from the ongoing litigation, it was reported that Nagatomi declined to comment, citing the litigation.
“As it is an ongoing litigation and this is a question for IHH/Fortis, we cannot comment,” Nagatomi said.
According to IHH’s latest annual report, Mitsui owns 32.91% in IHH as at April 30, 2020 while IHH’s second largest shareholder is Khazanah Nasional Bhd.
Moneycontrol reported that three months after IHH’s successful bid to acquire Fortis, its own shareholding underwent a significant change.
"Malaysian sovereign fund Khazanah, which was its largest shareholder, sold a 16% stake to existing investor Mitsui, making the Japanese trading company the biggest shareholder in IHH,” Moneycontrol reported.
IHH’s website indicates that Malaysia and Singapore-listed IHH is a leading premium healthcare provider operating in the home markets of Malaysia, Singapore, Turkey and India.
The group also has a growing presence in Greater China and an expanding network across Asia and Central and Eastern Europe, IHH said.
At Bursa Malaysia today, IHH’s share price was down five sen or 0.93% at RM5.32 at 11:15am, valuing the company at some RM47.13 billion.
Around 180,500 shares were traded.