SC bars Fortis Healthcare promoters from selling pledged shares
31 August 2017
Shares of Fortis Healthcare tanked nearly 6 per cent today after the Supreme Court refused permission to the hospital group's promoters Malvinder and Shivinder Singh to sell shares their companies that they have pledged with banks and financial institutions.
The Fortis stock slipped as much as 5.85 per cent to Rs145 on the BSE after the apex court clarified that the Singhs have to maintain the status quo of both encumbered and unencumbered shares held by their companies in Fortis Healthcare.
This means that banks and lenders cannot sell Fortis Healthcare shares pledged to them until further orders by the court.
RHC Holding Pvt Ltd and Oscar Investments Ltd, two companies controlled by the Singhs, approached the Supreme Court today for permission to sell their shares in Fortis Healthcare already pledged to banks and financial institutions. The sale was to help the Singhs reduce debt, according to them.
The two promoter entities needed to pay Rs4,68.37 crore by August-end towards repayment of interest and principal amount to creditors, according to their application to the Supreme Court.
RHC and Oscar sought clarity whether an 11 August order by the apex court applied to their encumbered shares in Fortis Healthcare as well. The order had directed the companies to maintain ''status quo'' of Fortis Healthcare Holding Pvt Ltd's shareholding in the hospital chain.
Fortis Holding, jointly owned by RHC and Oscar, has only sold encumbered shares in the hospital chain that were pledged to banks and lenders to repay loans to them, according to an application by RHC and Oscar. It had 42.86 per cent stake in Fortis Healthcare at the end of the June quarter and 82.76 per cent of this was pledged or otherwise encumbered, according to the BSE.
The Singhs were blocked from changing the status of Fortis Holding's shares in Fortis Healthcare after Japanese drug maker Daiichi Sankyo moved the Supreme Court to block them from selling stake in the hospital group. This matter is fixed for final disposal on 31 October.
On Tuesday last week, Rekha Jhunjhunwala, wife of investor Rakesh Jhunjhunwala, bought 4.5 million shares, or a 0.9 per cent stake, in Fortis Healthcare through a bulk deal at Rs134.65 per share, the NSE data showed.