Gurgaon :Fortis Healthcare Limited (Fortis), announced today that The Rating Committee of ICRA, after due consideration of the latest developments at the company, has revised Fortis’ rating for short-term borrowings from [ICRA]A1to [ICRA]A1+.

This is the highest credit rating accorded to a company and is reflective of Fortis’ improved liquidity profile following the sale of Quality Healthcare, Hong Kong, proceeds from which were utilised to further repay overseas debt and make liquid investments,providing financial flexibility to the company.

ICRA’s conclusions are consequent to the various fund-raising initiatives undertaken by Fortis in the last year. The company’s net debt has reduced considerably from approximately Rs. 7,000crore as on September 30, 2012 to ~Rs. 3,000 crore as on September 30 2013.Its net gearing too has declined from 1.6x to ~0.6 x, during the same period.Following the divestiture of Quality Healthcare, Hong Kong which was completed in October 2013, the net gearing is expected to further decline to ~ 0.3x.The rating upgrade by ICRA also takes into account the improvement in Fortis’ operating profitability.

ICRA analysed Fortis’ operating and financial performance on a consolidated basis, including its subsidiaries, associate hospitals, and hospitals under O&M contract, all involved in providing healthcare services.

Fortis’ domestic hospital portfolio and its diagnostics business in India, cumulatively account for the majorityof its consolidated revenues (~95%), reiterating its sharp India focus.ICRA’s rating upgrade acknowledges all these factors alongside Fortis’long and established track record in the healthcare sector in India; its diversified presence across healthcare verticals and an overall positive outlook towards healthcare services in the country.

Upgrades of this nature are noteworthy in the current challenging economic scenario.

Source : Lokesh Shastri