The acquisition of Lanka Hospitals’ stake by Indian healthcare giant Fortis will mark the beginning of a strategic partnership between the Sri Lankan government and Fortis last week, a top official of Lanka Hospitals told Mirror Business.
“Discussions are currently underway between the Lanka Hospitals and Fortis officials about the new structures and various other matters that need to be put in to place with the entrance of the latter. The hospital will be run more in the lines of a joint venture partnership,” Lanka Hospitals CEO Lakith Peris said.
He also confirmed that the Sri Lankan government wishes to retain the control of the hospital, and will not divest its shareholdings to Fortis held through Sri Lanka Insurance (SLIC) and Property Development Limited, a subsidiary of state banking giant Bank of Ceylon.
“Of course we don’t want Fortis to remain just a passive investor. We want them to get involved in the day-to-day operations of the hospital. With this partnership, we expect lot of value addition from Fortis, as they are highly experienced and possess expertise being a leading service provider in the Pan Asian healthcare scene” Peris pointed out.
SLIC as the main shareholder of Lanka Hospitals, holds nearly 56 percent of Lanka Hospitals while PDL holds 9.5 percent. Thus, the Sri Lankan government indirectly owns 66 percent of Lanka Hospitals. Last Friday, Fortis purchased the 29.6 percent stake held by Distilleries for a sum of Rs.3.98 billion. The minor shareholders have just over 7 percent of the company. If Fortis buys another 0.4 percent of Lanka Hospitals, the mandatory code would be triggered.
In case Fortis triggers a mandatory offer, Peris said even if all shares of minority shareholders are purchased in such a senario, the government institutions may not sell their stakes.
“The government and Fortis has a good understanding. As I said, what we are looking at is a strategic partnership.
The vision of our Chairman Defence Secretary Gotabhaya Rajapaksa is to make Lanka Hospital the most cost-effective private hospital in Colombo. Even with Fortis, we will pursue this vision” Peris emphasized. When inquired whether there will be a board level representation from Fortis, Peris said such matters are currently under consideration.
“Within a few days, we’ll be able to announce the changes resulting from Fortis acquisition. But nothing is finalized yet” he said.
Despite Fortis’ strong brand image in the Pan-Asian region, Peris also said that Lanka Hospitals may not undergo a re-branding exercise in terms of a name change or logo. Lanka Hospitals is also planning expand its operations by moving out of Colombo. “We are passionately looking at moving out of Colombo. We have looked at a several locations in order to cater people in the other parts of the country” Peris explained.
source - www.dailymirror.lk
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