RHT Health Trust reaches agreement to sell portfolio to Fortis Healthcare

TALKS on the sale of RHT Health Trust's assets to its controlling unitholder Fortis Healthcare have progressed further, with both sides on Feb 12 signing a master purchase agreement for Fortis to pay 46.5 billion Indian rupees (S$950 million) for the trust's entire portfolio of healthcare assets.

The consideration will be fully satisfied in cash. The news drove units of RHT Health Trust up 12 Singapore cents or 17 per cent to S$0.83.

The proposed disposal will result in the sale of all of RHT's Indian subsidiaries and its 49 per cent interest in Fortis Hospotel, as well as the entire asset portfolio of RHT, which includes its interests in 12 clinics, four greenfield clinics and two operating hospitals in India.

The directors of the trustee-manager had considered the financial advice from Merrill Lynch (Singapore) and "view the proposed disposal favourably and are supportive of the proposed disposal", the trust said.

The estimated consideration per unit represents a premium of 10.3 per cent to the trust's adjusted net asset value (NAV) per unit as at end-December 2017. It also represents a return of about 65.5 per cent, and an internal rate of return per annum of about 12.1 per cent in Singapore dollars terms.

It "presents an opportunity for RHT to realise the investments in the sale securities and unlock further value for the unitholders", the trust said.

As at Dec 31, the NAV attributable to the sale securities to be disposed of is about S$903.4 million. The consideration thus represents a net gain of about S$45.1 million.

RHT will be distributing the bulk of the net proceeds of the disposal (about S$710.6 million) to unitholders by way of a special distribution.

The final consideration and terms of the disposal will also be put to unitholders at an extraordinary general meeting, and the deal remains subject to the advice of KPMG as an independent financial adviser.

Fortis has an indirect interest of about 29.76 per cent in RHT. It is also India's second-largest healthcare provider.