Fortis Healthcare is selling its Fortis Malar hospital in Chennai to MGM Healthcare for Rs 128 crore.

The hospital chain said in a regulatory filing that the transaction comprises the divestment of the business operations pertaining to Fortis Malar Hospital for Rs 45.50 crore. This is part of the listed subsidiary of Fortis Healthcare — Fortis Malar Hospitals — in which the former holds 62.7 per cent.

Further, the deal includes the OPD and radiology business operations of Fortis Malar Hospital (including the land and building where the hospital is situated) and the land parcel adjacent.

These assets, part of Fortis Health Management (Fortis Healthcare’s subsidiary), will be sold for over Rs 47.59 crore.

There is an adjacent land parcel and another vacant land, which will be sold for around Rs 35 crore.

Fortis said the transaction will be an all-cash deal and is estimated to be consummated by the end of January.

The company added that the Malar hospital divestment is part of its portfolio rationalisation strategy to ramp up presence in select geographic clusters. Fortis Healthcare had in July divested business operations in its Vadapalani facility in Chennai.

The Fortis Malar Hospital is a 140-bed facility and has been “facing certain legacy issues’’, Fortis Healthcare said while adding that over the past few years several of these issues have been resolved.

“However, some of the legacy aspects persist, which have constrained further investments into the facility. The matter has accentuated the need to divest it,” it said.

MGM Healthcare said the buyout fits in with its strategy to expand in Chennai