Fortis to buy trustee of its SGX-listed assets owner Religare Health

Fortis Healthcare Ltd said on Thursday it will buy the trustee manager of the Singapore stock exchange-listed group firm Religare Health Trust that owns the real estate assets on which it runs its hospital chain, for $14.9 million (Rs 100 crore).

Religare Health Trust Trustee Manager Pte Ltd is majority owned by the group's financial services holding firm Religare Enterprises Ltd. The remaining 10 per cent is held by unnamed shareholders.

This comes three years after Fortis-sponsored Religare Health Trust, which houses the hospital services business of the healthcare firm, raised S$510.7 million ($419 million then) by listing its units on the Singapore Exchange. This was the largest IPO of a business trust sponsored by an Indian company in Singapore and the second-largest primary listing in Singapore that year.

Following the listing, Fortis, through its wholly owned overseas subsidiary, continues to hold 28 per cent stake in Religare Healthcare Trust.

Fortis Healthcare had announced in May 2012 that it is spinning off part of its healthcare services business into a separate unit, which would be listed in Singapore and would open up possibilities for separate fundraising plans for the business.

With that move, the clinical establishment division was taken out of Fortis, which retains the medical services division comprising in-patients departments, intensive care units, operation theatres and emergency services business. Religare Health Trust’s mandate is to principally invest in medical and healthcare assets and services in Asia, Australasia and emerging markets.

Fortis as a group had accumulated debt of over $1 billion and the firm was looking to deleverage its balance sheet through the fund raised at Singapore. Part of this debt got piled up due to the strategic moves by the group. Earlier, in a flip-flop in management strategy, billionaire brothers Malvinder and Shivinder Singh sold their privately held overseas healthcare assets to the public-listed firm in a deal worth $665 million.

Fortis Healthcare acquired Fortis Healthcare International Pte, consolidating the global healthcare business under a single roof. This essentially meant that the Singh brothers part-funded their own public-listed firm to buy a company owned by them (more on that here). In early 2011, the promoters also sold their entire holding of 74.59 per cent in IPO-bound diagnostics chain SRL to Fortis Healthcare for Rs 803 crore.

Fortis Healthcare shares last traded at Rs 160.85 a piece, up 0.5 per cent on the BSE in a strong Mumbai market on Thursday.

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