PETALING JAYA: The Economic Times of India reported late on Tuesday that Malaysia’s IHH Healthcare Bhd, which recently succeeded in its bid for the much coveted Fortis Healthcare Ltd for 40 billion rupees (RM2.35 billion), is likely to exit its maiden investment in India, Kolkata’s Apollo Gleneagles Hospitals.
According to the report which cited people with knowledge of the exit plan, the move is in accordance with a clause in a non-compete agreement between joint venture partners Apollo Hospitals and Parkway Pantai, a subsidiary of IHH, one of the largest healthcare groups in the world by market capitalisation.
The clause states that any partner who takes up a stake in a rival hospital will have to sell its stake to the other.
Parkway Pantai and Apollo Hospitals have equal share in the joint venture set up in 2002, which owns the 425-licensed bed multi-specialty tertiary hospital in Kolkata which focuses on cardiology, general surgery, orthopaedics and transplants. It is the only hospital in eastern India to be Joint Commission International-accredited.
Back in 2015, The Economic Times reported that the Prathap Reddy family, promoters of India’s largest hospital chain Apollo Hospitals, and IHH, then its second largest shareholder with a 10.85% stake, had locked horns over IHH’s aggressive acquisition strategy in India. IHH purchased Continental Hospitals and Global Hospitals for about 16 billion rupees that year.
In 2017, IHH sold its entire stake in Apollo Hospitals Enterprise.
On Bursa Malaysia on Tuesday, IHH closed up 10 sen at RM5.62, with some 6.5 million shares changing hands.
Source: The Sun Daily