Fortis board clears RHT portfolio acquisition for Rs 4,650 cr
New Delhi, Nov 15 (PTI) Fortis Healthcare board hasapproved the proposed acquisition of entire portfolio ofSingapore-listed RHT Health Trust (RHT) for an enterprisevalue of around Rs 4,650 crore, the company said today.
The step is part of a restructuring initiative aimed atconsolidating the entire Indian asset portfolio comprisingvarious clinical establishments and two operating hospitals ofRHT Health Trust into Fortis.
Fortis and RHT have inked a pact proposing theacquisition of all the securities of RHT's entities in Indiaholding, clinical entities and businesses via purchase ofsecurities for an enterprise value of around Rs 4,650 crore,Fortis said in a statement.
This includes Rs 1,152 crore of debt of RHT as on date,it added.
"This restructuring is a significant initiative and willintegrate RHT's entire India-based asset portfolio into Fortiswhile also improving the overall financial health of thebusiness," Fortis Healthcare CEO Bhavdeep Singh said.
The proposed purchase of securities will be conducted onan arm's length basis, he added.
"The proposed transaction would be funded by Fortis witha combination of equity, quasi-equity and/or debt. Fortis hasan enabling resolution in place to raise capital for up to Rs5,000 crore," Singh said.
The proposed transaction will be subject to thesatisfaction of conditions precedent, including regulatoryand shareholder approvals by Fortis, approvals by RHT unitholders and other approvals as may be required, he added.
Fortis has an indirect interest of 29.76 per cent in RHT.
The term sheet signed by both Fortis and the trustee-manager of RHT is intended to set out the basis for furtherdiscussion in respect of the proposed transaction.
Both Fortis and RHT have entered into an exclusivityperiod for 60 days commencing from the date of the term sheetwith a view to executing definitive agreements for theproposed transaction.
Fortis has also entered into hospital and medicalservices agreements with entities held by RHT under which itpays service fees to such entities for services rendered.
For 2017-18, the net cumulative service fees to be paidby Fortis to RHT is estimated to be around Rs 270 crore.
"Upon completion of the securities acquisition, theservice fees that Fortis was paying will be completelyeliminated, thereby improving significantly its operatingprofitability," Fortis said. PTI MSSARD.
This is unedited, unformatted feed from the Press Trust of India wire.