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Singapore-listed RHT Health Trust signed an agreement on Monday to sell its entire asset portfolio for a total of 46.5 billion Indian rupees, or S$950 million in cash, revealed an SGX filing on Tuesday (13 February).
The buyer is its controlling unitholder Fortis Healthcare, which owns a 29.76 percent stake in RHT. The purchaser is also the second biggest healthcare provider in India.
“The proposed disposal will result in the disposal of all of RHT’s Indian subsidiaries and its 49 percent stake in Fortis Hospotel Limited and the entire asset portfolio of RHT, which includes its interests in 12 clinical establishments, 4 greenfield clinical establishments and 2 operating hospitals in India.” It also involves the sale of all share capital in International Hospital Ltd and Fortis Health Management Ltd.
Moreover, RHT Health Trust disclosed that the board of directors of its trustee-manager have appointed BofA Merrill Lynch to advise on the deal’s financial perspective. Having considered the advice, they “view the proposed disposal favourably and are supportive of it”.
This is because the selling price translates to a premium of 10.3 percent to RHT’s adjusted net asset value (NAV) per unit as of 31 December 2017. It is also 23.9 percent higher than the trust’s closing price of S$0.71 on 12 February 2018. In addition, it will lead to a net gain of around S$45.1 million, as the NAV of its entire portfolio amounted to S$903.4 million as of 31 December 2017.
“It also represents a return of approximately 65.5 percent and an internal rate of return (IRR) per annum of approximately 12.1 percent in Singapore dollars terms and presents an opportunity for RHT to realise investments in the sale and unlock further value for unitholders.”
Net proceeds from the sale is expected to amount to about S$710.6 million. However, the trustee-manager’s Audit Committee is still awaiting the advice of independent financial adviser KPMG Corporate Finance, before providing its view on the mulled sale.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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