Fortis (NYSE:FTS) Healthcare Limited has announced the sale of its Fortis Malar Hospital located in Gandhi Nagar, Adyar, Chennai, to MGM Healthcare Private Limited for approximately ₹128 crore (INR100 crore = approx. USD12 million) in cash. The deal is expected to be finalized by the end of January 2024, pending shareholder approval and the fulfillment of other conditions.
The divestiture of the 140-bed hospital is part of Fortis' strategy to dispose of less profitable assets and concentrate on core market clusters to boost growth. Fortis Malar Hospital has been grappling with legacy challenges, and the sale reflects a strategic move by Fortis Healthcare to streamline its operations.
MGM Healthcare, the acquiring entity, currently manages two hospitals with a total capacity of 600 beds and is in the process of developing another facility in the Tamil Nadu and Pondicherry region. This acquisition is set to expand MGM Healthcare's footprint in the healthcare sector.
In terms of financial performance, Fortis Healthcare reported a decline in net profit by 15.7% year-over-year for the July-September period. However, the company also experienced a revenue increase of 10% during this time, indicating a mixed financial landscape for the healthcare provider.
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