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February 4, 2016

Fortis Healthcare to acquire 51% stake in RHT’s Fortis Hospotel

Fortis Healthcare is planning to acquire a 51% stake in Fortis Hospotel (FHTL), a subsidiary of Singapore-based Religare Health Trust (RHT), for Rs9.7bn ($143m).

Fortis Healthcare is planning to acquire a 51% stake in Fortis Hospotel (FHTL), a subsidiary of Singapore-based Religare Health Trust (RHT), for Rs9.7bn ($143m).

RHT, a business trust of which Fortis is a sponsor with a 28% equity stake, has a portfolio of 12 clinical establishments, four greenfield clinical establishments and two operating hospitals in India.

Of the 12, two establishments in the trust, Fortis Hospital and the Fortis Memorial Research Institute (FMRI) are under FHTL in which both Fortis and RHT are currently shareholders.

Fortis Healthcare executive chairman Malvinder Singh said: "RHT will continue to be a strategic vehicle for our asset light growth in India and will play a larger role in our India centric expansion plans going forward.

"With a potential to double our existing bed capacity from the current approximately 4,500 beds, RHT will undertake a majority of the investments for all our brownfield and bolt on expansion plans in all the clinical establishments in its portfolio."

"RHT will continue to be a strategic vehicle for our asset light growth in India and will play a larger role in our India centric expansion plans going forward."

According to the company, the investment payable will be funded largely through internal accruals. As the majority of FHTL is acquired, it will be consolidated with Fortis as a subsidiary.

Fortis Healthcare CEO Bhavdeep Singh said: "After taking a well deliberated view, we have decided to enter into this transaction.

"RHT will continue to support us in optimally expanding our bed capacity.

"Given our heightened focus on patient care and high-end medical programmes backed by robust processes and world class medical talent, we believe the company is best positioned to significantly improve the quality of healthcare in the country.

"As we move forward, we expect our operations to continue to show an upward trajectory.

"The current transaction, being EPS accretive from the first year itself would also incrementally accelerate our objective of becoming PAT positive at the earliest."

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