FORTIS AND THE TRUSTEE MANAGER OF RHT SIGN TERM SHEET AND ENTER INTO EXCLUSIVITY FOR 60 DAYS TO NEGOTIATE AND EXECUTE DEFINITIVE AGREEMENTS

Bangalore, November 14, 2017: Fortis Healthcare Limited (“Fortis”) announced that its Board of Directors in its meeting held today has approved a major restructuring initiative aimed at consolidating the entire Indian asset portfolio (12 Clinical Establishments, 4 Greenfield Clinical establishments and 2 Operating Hospitals) of RHT Health Trust (“RHT”) into Fortis.

Fortis and the trustee-manager of RHT have today signed a term sheet and entered into an exclusivity arrangement proposing the acquisition of all the securities of RHT’s entities in India holding (directly or indirectly) clinical establishments and businesses via a purchase of securities for an enterprise value of approximately INR 4650 Crores. (“the proposed transaction”). This includes INR 1152 Crores of debt as on date which will be used to repay RHT’s debt. RHT currently has 807.8 Million units outstanding.

It is expected that a substantial part of the net proceeds (after repaying debt) received by RHT would be distributed to its unit-holders including Fortis; thereby reducing the net investment consideration that Fortis would incur.

The term sheet signed by both Fortis and the trustee-manager of RHT is intended to set out the basis for further discussion in respect of the proposed transaction. Both Fortis and RHT have entered into an exclusivity period for 60 days commencing from the date of the term sheet with a view to execute definitive agreements for the proposed transaction.

RHT is a registered business trust listed on the Main Board of the Singapore Exchange Securities Trading Limited (“SGX-ST”). Fortis is a controlling unit holder with an indirect interest of 29.76 % in RHT. The proceeds raised from the listing of RHT in October 2012 on the SGX-ST were used by Fortis to de-leverage its Balance Sheet. Fortis has also entered into Hospital and Medical Services Agreements with entities held by the Trust under which Fortis pays service fees to such entities for services rendered, including clinical establishments services used in Fortis providing its medical services. For FY18, the annualized net cumulative service fees (basis Q1FY18 net fees) to be paid by Fortis to RHT is estimated to be approximately INR 270 Crores.

Fortis believes that the proposed transaction will potentially enhance value for all its stakeholders. With the unwinding of the current structure, it would also make it easier for investors and other stakeholders to better understand the Company’s business and financial performance. Upon completion of the securities acquisition, the service fees that Fortis was paying will be completely eliminated thereby improving significantly its operating profitability .i.e. EBITDA and cash flows. With Fortis’s completion of proposed current transaction; the cumulative expected incremental positive impact on EBITDA would be approx. INR 270 Crores. In addition, with the acquisition of 49% of Fortis Hospotel Limited (FHTL) which is part of this proposed transaction, there will be an interest saving of approximately of Rs 75 Cr.

Commenting on the proposed transaction, Bhavdeep Singh, CEO Fortis Healthcare Limited, said  “We are constantly looking at ways to provide comprehensive healthcare solutions which translates into a meaningful value proposition for all stakeholders – health providers, consumers, partners, investors and others. This restructuring is a significant initiative and will integrate RHT’s entire India based asset portfolio into Fortis while also improving the overall financial health of the business.”

The proposed purchase of securities will be conducted on an arm’s length basis. Both parties continue to be independently advised by their respective advisers with a view to executing definitive agreements for the transaction and in bringing the proposed transaction to a conclusion in a timely manner.

The proposed transaction would be funded by Fortis with a combination of equity, quasi-equity and/or debt. Fortis has an enabling resolution in place to raise capital for upto Rs 5000 Cr and has been in active dialogue with financial/ strategic investors to raise funds, supported by Standard Chartered Bank as its financial advisor for this purpose.

The proposed transaction will be subject to the satisfaction of conditions precedent including regulatory and shareholder approvals by Fortis, approvals by RHT unit holders and other approvals as may be required.