* To sell entire 64 pct in Australia unit to Bupa
* Fortis to receive $285 mln, to cut debt
* Deal negative in long-run - analyst
* Share rise 6.2 pct in slightly weak overall mkt
MUMBAI, Dec 17 Shares in India's Fortis
Healthcare soared on Monday on the company's plans to
raise A$270 million ($285 million) through divestment of its
Australia dental business, a move that would cut its debt.
Fortis, India's No. 2 hospitals chain after Apollo Hospitals
Enterprise, runs healthcare facilities in Singapore,
Malaysia, the Gulf and other Asian countries and had a
consolidated net debt of $1.1 billion at end-June.
The company said it is selling its 64 percent stake in
Dental Corp Holdings Ltd, Australia, to British medical services
group Bupa to focus on high-end healthcare operations
The entire proceeds will be used to reduce the group's debt,
Fortis group Chief Executive Vishal Bali told news channel
Some analysts were skeptical about the move as the
Australian business, which had A$339 million in sales in the 12
months to June, was one of the key revenue generators for
"Although prima facie the deal looks good, it will have a
negative impact on a long-term basis," said Siddhant Khandekar,
analyst at ICICI Direct.
The Dental Corp business has operating margins of 15 to 18
percent, which is higher than Fortis' overall operating margin,
Fortis bought the Dental Corp stake in January 2011, hoping
to expand the business across other regions but has been unable
to do so.
It raised the number of dental practices in Australia and
New Zealand to 190 from 140 in the nearly two years it owned the
business, the company said in a statement late on Sunday.
Fortis shares were up 6.2 percent at 116 rupees on Monday
morning, slightly below an earlier high of 117.35 rupees,
compared to a 0.13 percent fall in the main Mumbai index
(Reporting by Kaustubh Kulkarni and Abhishek Vishnoi)