SINGAPORE (Feb 14): CIMB is leaving its DPU estimates of RHT Health Trust unchanged and maintaining its "hold" call with 92 cents target price pending further details on the transaction in the upcoming circular.
Following an initial announcement in Nov 2017, RHT announced on Monday it had entered into a master purchase agreement with Fortis Healthcare in relation to the disposal of the entire asset portfolio of RHT Health Trust.
This includes its interests in 12 clinical establishments, four greenfield clinical establishment and two operating hospitals in India, to Fortis. The deal is subject to unitholders’ approval at an EGM. The long stop date is Sept 30.
According to the agreement, the net consideration works out to be $710.6 million or 88 cents per unit after taking into account the revised final consideration of INR46 billion after a downwards adjustment of INR500 million due to parties not obtaining warranty and indemnity insurance, an exchange rate of INR48.5 to the Singdollar and repayment of RHT’s external borrowings of $237.9 million.
The estimated consideration of 88 cents/unit represents a 10.3% premium over the adjusted book value of 79.75 cents and is at a 6.1% and 4.6% premium to the 1-month and 3-month VWAP, respectively. The net proceeds post settlement of transaction costs of $15.8 million including a $10.3 million trustee-manager performance fee which works out to be 86 cents/unit.
Meanwhile, the trustee-manager also updated it has received a further INR530 million from Fortis towards the payment of outstanding fees for both 1H18 and 3Q18. Hence, an aggregate of INR670.7 million accrued and due remains outstanding for 9M18.
The trustee-manager will consider the distribution of the remainder distributable income for 9M18 when it receives the remainder of service fees and interest income on the CCDs (contingent credit default swaps).
As at 11.53am, units in RHT Health Trust are down 1 cent at 82 cents.
