Fortis’ Loss Widens On Write-Offs Related To Singh Brothers
Fortis Healthcare Ltd.'s quarterly loss widened as it wrote off, among other things, loans and deposits related to the Singh brothers, its erstwhile promoters.
India’s second largest hospital chain, which is evaluating takeover bids, reported a net loss of Rs 932 crore for the quarter ended March compared with a Rs 68-crore loss in the year-ago period, according to its exchange filings. That was largely due an exceptional loss of Rs 833.5 crore the company attributed to write off of goodwill, inter-corporate deposits and advances.
The deposits were used by the borrower companies for "granting or repayment of loans to entities related to the promoters". Malvinder Singh and Shivinder Singh, who have lost control of the hospital company after lenders invoked pledged shares, are being probed for siphoning funds from Fortis Healthcare and Religare Enterprises Ltd. to settle personal debt.
The earnings were announced after the meeting of the newly constituted board stretched for two days. The board had deferred approval of quarterly and annual financial results, saying more time is needed to consider the aspects of outcome of an internal investigation on alleged financial irregularities, wire agency PTI had reported.
Revenue in January-March fell 3 percent to Rs 1,086 crore while earnings before interest, tax, depreciation and amortisation fell 85 percent to Rs 12 crore. The company’s operating margin contracted to 1.1 percent from 6.9 percent.
Here are the key highlights from the investigation report.
This comes at a time when the healthcare chain is in the process of finding a buyer. In its last board meeting, Fortis had invited the Munjal-Burman combine, TPG-backed Manipal Health and IHH Healthcare which had submitted binding offers in the previous round to submit fresh bids for the company. The company also decided to include Radiant Life Care Pvt. Ltd. in the fresh bidding process despite the lack of a binding bid.