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Fortis to buy Singapore firm RHT Health Trust's portfolio for Rs 4,650 cr

Fortis has an indirect interest of 29.76% in RHT; after the deal is completed service fees that Fortis was paying will be completely eliminated

Press Trust of India  |  New Delhi 


Healthcare board has approved the proposed of the entire portfolio of Singapore-listed (RHT) for an enterprise value of around Rs 4,650 crore, the company said on Wednesday.

The step is part of a restructuring initiative aimed at consolidating the entire Indian asset portfolio comprising various clinical establishments and two operating hospitals of into

and RHT have inked a pact proposing the of all the securities of RHT's entities in holding, clinical entities and businesses via purchase of securities for an enterprise value of around Rs 4,650 crore, 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 will integrate RHT's entire India-based asset portfolio into while also improving the overall financial health of the business," Healthcare CEO Bhavdeep Singh said.

The proposed purchase of securities will be conducted on an arm's length basis, he added.

"The proposed transaction would be funded by with a combination of equity, quasi-equity and/or debt. has an enabling resolution in place to raise capital of up to Rs 5,000 crore," Singh said.

The proposed transaction will be subject to the satisfaction of conditions precedent, including regulatory and shareholder approvals by Fortis, approvals by RHT unitholders and other approvals as may be required, he added.

has an indirect interest of 29.76 per cent in RHT.

The term sheet signed by both and the trustee-manager of RHT is intended to set out the basis for further discussion in respect of the proposed transaction.

Both and RHT have entered into an exclusivity period for 60 days commencing from the date of the term sheet with a view to executing definitive agreements for the proposed transaction.

has also entered into hospital and medical services agreements with entities held by RHT under which it pays service fees to such entities for services rendered.

For 2017-18, the net cumulative service fees to be paid by to RHT is estimated to be around Rs 270 crore.

"Upon completion of the securities acquisition, the service fees that was paying will be completely eliminated, thereby improving significantly its operating profitability," said.

First Published: Wed, November 15 2017. 11:52 IST