Fortis unit to offer 567.45m units at 90 cents each: sources
RELIGARE Health Trust (RHT), which is seeking a flotation on the Singapore Exchange (SGX), will raise some $511 million as it will list 567.45 million units at 90 cents, sources said.
The offer is on the lower end of the 88-97 cents range indicated in its preliminary prospectus which was lodged with the Monetary Authority of Singapore last month.
The distribution yield is expected to be 8.9 per cent in FY2013 and 9.1 per cent in FY2014.
According to a source, the placement tranche was oversubscribed by close to three times, with interest from more than 100 investors, largely from Asia.
BT understands that just under 5 per cent of the units have been set aside for the public offer, with the listing likely to take place by the end of next week.
RHT is backed by parent company Fortis Healthcare, which will own 28 per cent of the units in the trust post-listing.
The New Delhi-based hospital operator, which took on Malaysia's Khazanah Nasional in the battle for Parkway Holdings in 2010, had said previously that it is shifting towards a more asset-light model to focus on its core business of medical healthcare services.
Hiving off its clinical establishments into the trust also allows Fortis to deleverage its balance sheet.
Healthcare stocks are often viewed as a defensive play, as seen by the recent interest in the dual-listed IHH Healthcare, which made its debut on the Bursa Malaysia and SGX in July this year.
And RHT's initial portfolio will give investors exposure to the private healthcare industry in India, the world's second most populous country.
The Indian healthcare market is expected to be worth nearly US$120 billion by 2015, up from US$60 billion in 2010, according to a report by Frost & Sullivan.
RHT's portfolio will start with 11 clinical establishments, two hospitals managed and operated by the trust and four greenfield clinical establishments across India, worth a total of $748 million based on an independent valuation, according to the preliminary prospectus.
As at June 30, 2012, RHT's portfolio has 1,782 operational beds and an installed capacity of 3,197 beds.
Fortis has operations in 10 markets across the Asia Pacific, including Singapore.