India: Fortis proposes to buy out assets of Singapore-based RHT Health for $711m

Visual from Fortis website

Singapore-based RHT Health Trust Manager Pte. Ltd has entered into term sheet with its controlling shareholder Fortis Healthcare Ltd, to sell its entire portfolio of assets for Rs 4,650 crore ($711 million).

In a filing to the stock exchanges, RHT Health Trust Manager Pte Ltd said it has received a proposal from Fortis to acquire all the sale securities held by RHT Singapore’s wholly-owned subsidiaries, Fortis Global Healthcare Infrastructure Pte Ltd and RHT Healthtrust Services Pte Ltd.

Fortis has an indirect interest of around 29.76 per cent  in RHT.

Through this transaction, the Singapore-based firm will sell its Indian subsidiaries, 49 per cent stake in Fortis Hospitel Ltd, and its entire asset portfolio including holdings in 12 clinical establishments, four greenfield projects and two operating hospitals in India.

The exclusivity period will be valid for two months.

The net proceeds are intended to be substantially distributed to unit holders, said RHT. The proposed value of the deal also includes Rs 1152 crore of debt, and the proceeds from the transaction would also be used to pay off this debt.

“With this unwinding of the current structure, it would make it easier for the investors and other stake holders to better understand the company’s business and financial performance,” said Fortis in its filing to the stock exchanges.

The transaction would be funded with a combination of equity, quasi-equity and/or debt, said Fortis. The company has an enabling resolution in place to raise capital for up to Rs 5,000 crore and has been in talks with various financial and strategic investors to raise funds.

Cash-strapped Fortis, promoted by brothers Shivinder and Malvinder Singh, has been aggressively seeking buyers for its various businesses.

Earlier this year, it was reported that Asia’s largest private hospital operator IHH Healthcare Bhd was keen on acquiring stake in Fortis, however the Malaysian firm denied the reports saying it was not conducting any due diligence in India.

The Singh brothers have also been embroiled in a legal battle with Japan’s Daiichi Sankyo Ltd, which has been blocking the promoters’ plans to sell stake in Fortis, after a bitter dispute.

Last month, the Supreme Court refused to allow bankers to sell Fortis shares to recover their money. The brothers have pledged shares worth approximately Rs 1,582.75 crore with Yes Bank Ltd, Rs 390 crore with Axis Bank Ltd, Rs 413 crore with ECL Finance Ltd and Rs5 5 crore with RBL Bank Ltd.

Also Read:

India’s Fortis Healthcare considering buyout of Singapore’s RHT Health Trust