Dubai JV will yield revenues from 2015-16 Fortis Health

India-based Fortis Healthcare Ltd will see revenues from its recent Dubai tie up from 2015-16, even as it ruled out anymore acquisition or expansion in the near future and consolidate its existing operations to improve margins.

The Group CEO of Fortis Healthcare Vishal Bali told Deccan Herald: “The real impact of our tie-up with Majid Al Futtaim Healthcare (MAFH) is going to happen in 2015-16, because by that time we expect one or two more clinics (of MAFH) to come up in the GCC (Gulf Cooperation Council) and thereby benefit from a Fortis P&L perspective.”

Fortis inked an agreement with MALH to operate and manage its (MALH’s) first healthcare foray, a day care specialty clinic, expected to come up in Dubai in the first half of 2013.  He added that Fortis would look to grow its independent diagnostic business also in the GCC region.

He added, “Over the next couple of quarters, we won’t be pursuing any merger, acquisition or expansion; instead we will be focusing on consolidation of our operations by improving margins and trim its balance sheet (reducing debt).

On deleveraging Fortis’ balance sheet, he said the debt-to-equity ratio (DER) currently is about 1:1 and would be down to about 0.60 to 0.70 within the next two-three quarters. When asked if that would mean fresh issue of equity to PE investors, he said, “That is one of the many options with us but there isn’t concrete as of now.”

Fortis sponsored Religare Health Trust raised about Rs 2,250 crore in October this year, proceeds of which were used to lower its debt from about Rs 5,536 crore as on September 30, 2012 to about Rs 4,400 crore.

Simultaneously, the company got its Board approval last month to raise up to Rs 2,000 crore. The promoters held 81.48 per cent as on September 30, 2012, which needs to be brought down to 75 per cent by June 2013 in accordance with market regulator Sebi guidelines.

Bali said that in future, the company would like its consolidated revenues from India and global operations to be in the ratio of 60:40. During the quarter ended September 30, 2012, its India operations contributed Rs 724 crore and international operations Rs 770 crore.

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