A FEUD between 3 co-founders and shareholders of Fullerton Healthcare has concluded in a definitive settlement agreement that will pave the way for the group to complete a merger proposed by Hong Kong-based private equity (PE) fund RRJ Capital.

In a press statement on Tuesday (Jul 19), Fullerton Health said dissenting minority shareholders Michael Tan and Daniel Chan had withdrawn their petition filed in January 2022 to wind up the company, as per the settlement agreement.

Following completion of the proposed merger, Tan and Chan will also step down from the group’s 9-member board of directors, as well as all executive and non-executive positions in the group and its related companies across all countries.

RRJ’s proposed merger involves a cash injection of S$350 million and a loan arrangement, on top of a new corporate structure.

According to the group, the merger has been approved by 85.8 per cent of shareholders as at May 5 this year. It is expected to complete “in the coming weeks”.

RRJ counts as Fullerton Health’s largest creditor and is co-founded and led by Malaysian brothers Richard and Charles Ong. The PE firm’s chairman and chief executive, Richard Ong, joined Fullerton Health’s board as a non-executive director, following RRJ’s subscription to the group’s senior perpetuals over 2 years ago. 

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“With the amicable settlement, Fullerton Health can embark on a new chapter of growth, with a stronger balance sheet and a new corporate structure to pursue post-pandemic growth opportunities,” said the group’s board chairman, Michael Lim.

Fullerton Health is majority-owned by the group’s president and deputy chairman David Sin, who sued Tan and Chan in July 2021 amid discussions over the potential sale of the company, which the 3 founded in 2011.

Sin controls SIN Capital, which majority owns Fullerton Health. Tan and Chan were formerly Fullerton Health’s chief executive officer (CEO) and deputy CEO, before stepping down from their respective roles around end-2019 to both remain as minority shareholders and executive directors.

The legal dispute between the 3 co-founders arose last year as they were sussing out their options for “Project Phoenix” - a proposed transaction for the sale of up to 100 per cent of the company which was approved by the board in December 2020, and saw the launch of a 2-phased bidding process in 2021.

The first round of “Project Phoenix” drew 9 non-binding bids including from KKR, Platinum Equity, Warburg Pincus (WP), and Coalition Capital. After WP and Coalition were shortlisted, a preliminary offer came in from New York-listed SPAC (special purpose acquisition company) Longview Acquisition Corp II - one which Sin viewed was “superior” although Tan and Chan did not agree with the terms.

Another “unsolicited” non-binding offer received in July 2021 from Singapore-headquartered PE firm Platinum Equity further frayed ties between the 3 co-founders. While Tan and Chan abstained from voting after objecting against the offer, all other directors including Sin voted in favour of accepting it.

The Business Times previously reported that Sin’s intentions to sell all of Fullerton Health was met with pushback from Tan and Chan - who did not wish to sell their shares in the company, and were then keen to stay on as directors and shareholders.