Fortis Healthcare rises 5%; Delhi Court asks firm to respond on Daiichi’s plea to stall restructuring process

Fortis Healthcare share price gained more than 5 percent intraday Friday after the Delhi Court asked company to respond on Daiichi’s plea to stall restructuring process.

The Delhi High Court on Thursday asked Fortis Healthcare Ltd, which is going through the process of restructuring, to give its response on Japanese pharma major Daiichi Sankyo’s plea to maintain status quo of the assets of the hospital chain.

Justice Jayant Nath made Fortis Healthcare Ltd (FHL) a party in the fresh application of Daiichi after the FHL counsel said it was not a party to the Rs 3,500 crore execution suit filed by the Japanese firm against the former promoters of India’s Ranbaxy Laboratories Ltd — Malvinder and Shivinder Singh.

The court was hearing Daiichi’s plea to stall the restructuring process until it was paid the Rs 3,500 crore arbitration award by Fortis’ erstwhile promoters, the Singh brothers. The court listed the matter for further hearing on April 25.

The court also asked RHC Holding Pvt Ltd and Oscar Investments Ltd, companies controlled by the Singhs, to explain how they had arrived at the realisable value of shares in March 14, 2017 order.

It also asked the two companies to disclose their unencumbered shareholding in FHL through Fortis Healthcare Holdings Pvt Ltd (FHHPL), as on March 6 last year and April 5. RHC and Oscar hold shares in Fortis through FHHPL.

In its application, Daiichi, represented by senior advocate Arvind Nigam, has sought a direction to the Singhs and their companies to fulfil the undertaking given to the court in June last year, before initiating any scheme of restructuring or transaction involving FHL.

During the hearing, senior advocate P Chidambaram, appearing for FHL, argued that the company was not a party in the suit and no order can be passed against it. He said that the restructuring process would not be concluded any time soon and take some time as FHL would require several regulatory approvals.

He said that earlier FHHPL had 52 percent shares in FHL but today the holding company owned only 0.67 percent shares in Fortis Healthcare and 99 percent of FHL is owned by banks and other shareholders.

The high court on January 31 had upheld the international arbitral award passed in the favour of Daiichi and paved the way for enforcement of the 2016 tribunal award against the brothers, who had sold their shares in Ranbaxy to Daiichi in 2008 for Rs 9,576.1 crore. Sun Pharmaceuticals Ltd had later acquired the company from Daiichi.

Daiichi had moved the high court seeking direction to the brothers to take steps towards paying its Rs 3,500 crore arbitration award, including depositing the amount. It had also urged the court to attach their assets, which may be used to recover the award.

At 12:10 hours IST, the stock price was quoting at Rs 144.40, up Rs 6.90, or 5.02 percent on the BSE.moneycontrol