Fortis Healthcare Limited (BSE:532843) entered into a term sheet to acquire International Hospital Limited and Fortis Health Management Limited from Fortis Global Healthcare Infrastructure Pte Ltd. for INR 46.5 billion on November 14, 2017. On February 12, 2018, an agreement was signed. As per terms, all shares of International Hospital Limited and Fortis Health Management Limited will be acquired along with all of the compulsorily convertible debentures of International Hospital Limited issued by International Hospital Limited and all of the non-convertible bonds issued by Fortis Health Management Limited to Fortis Global Healthcare Infrastructure Pte Ltd. The consideration is payable in cash and is subject to adjustments. The consideration will be funded through equity and debt. As of November 14, 2018, Fortis Healthcare Limited expects to use the majority of INR 40 billion raised from Northern Tk Venture Pte Ltd, indirect subsidiary of IHH Healthcare Berhad, to fund the acquisition. The balance of the consideration is intended to be funded by bank borrowings to be raised by Fortis. Upon completion, International Hospital Limited and Fortis Health Management Limited will become wholly owned subsidiaries of Fortis Healthcare Limited. If for any reason whatsoever, Fortis Healthcare Limited is unable to execute the definitive agreement on or prior to the expiry of the agreed date, a sum of SGD 1 million (INR 48.1 million) will be paid to RHT Health Trust, parent of Fortis Global Healthcare Infrastructure Pte Ltd, as and by way of liquidated damages for the costs, expenses and losses incurred by RHT Health Trust and Fortis Global Healthcare Infrastructure Pte Ltd with respect to the proposed transaction and all events leading thereto. For the year ending March 31, 2017, International Hospital Limited reported total revenues of INR 3.62 billion and Fortis Health Management Limited reported revenues of INR 1.03 billion. A committee of RHT Health Trust has been established for the transaction. The transaction is subject to certain conditions including definitive agreement, approvals from Singapore Stock Exchange, Competition Commission of India, statutory, lenders, approval from unitholders’ of RHT Health Trust, noteholders and other approvals. The Board of Directors of Fortis Healthcare Limited approved the transaction on November 14, 2017. As of April 30, 2018, the transaction was approved by the noteholders of RHT Health Trust. As on May 5, 2018, the transaction was approved by the shareholders of Fortis Healthcare Limited. As of August 29, 2018, the independent Directors of to RHT Health Trust recommended the unitholders to vote in favor of the transaction based on advice of the independent financial advisor. On September 2, 2018, the transaction was approved by the unitholders of RHT Heath Trust. Fortis Healthcare Limited and Fortis Global Healthcare Infrastructure Pte Ltd have agreed to enter into an exclusivity period of 60 days from the date of terms sheet to execute a definitive agreement. The term sheet shall automatically terminate upon the execution of the definitive agreements, if any of the conditions precedent to the transaction are not capable of being fulfilled, the mutual consent of Fortis Healthcare Limited and Fortis Global Healthcare Infrastructure Pte Ltd. in writing or the expiry of the exclusivity period (unless otherwise extended by Fortis Healthcare Limited and Fortis Global Healthcare Infrastructure Pte Ltd), whichever date being the earliest. As of January 15, 2018, the exclusivity period has been extended by an additional period of 31 days commencing from January 12, 2018. The conditions are expected to be fulfilled by September 30, 2018, being the long stop date. The transaction is expected to complete in 6 to 9 months from signing of term sheet. As per the amendment agreement, the long stop date for the fulfillment of conditions precedent has been extended from September 30, 2018 to December 31, 2018. The extension had been requested by Fortis Healthcare, as it is in the process of raising funds which is pending regulatory approvals. As of August 29, 2018, completion shall take place on a date that is mutually agreed in writing, but shall not be a date beyond 15 days from the date of receipt of the certificate of satisfaction of conditions precedent. The long stop date remains as December 31, 2018. As of December 31, 2018, the long stop date has been extended to March 26, 2019. The extension of the long stop date has been accepted and approved by RHT and Board of Directors of Fortis Healthcare Limited. Proceeds from transaction will be partially used by RHT Health Trust to pay performance fee to RHT Health Trust Manager Pte. Ltd., manager of RHT Health Trust, transaction costs and expenses and settlement of all the third party liabilities including repayment of IndusInd Bank’s overdraft facility. The 95% of net proceeds amount from the deal will be distributed to unitholders of RHT Health Trust and 5% will be used to cover on-going expenses. Merrill Lynch (Singapore) Pte. Ltd. and KPMG Corporate Finance Pte. Ltd. acted as financial advisors to the Directors of RHT Health Trust. Evelyn Wee, Lee Xin Mei, Terence Choo, Stephanie Zhao and Hoon Chi Tern of Rajah & Tann and Dhruv Singhal, Shriyani Datta and Pooja Natarajan of AZB & Partners acted as legal advisors and Boardroom Corporate & Advisory Services Pte. Ltd. acted as a registrar to RHT Health Trust. Sundeep Dudeja, Vaibhav Kakkar, Prashant Shah, Vivek Agarwal, Sahil Arora, Debarpan Ghosh, Bhavini Singh, Keshav Pareek and Harish Kumar of L&L Partners acted as legal advisors to Fortis Healthcare Limited. Duff & Phelps India Private Limited acted as an independent valuer. RHT Health Trust will pay SGD 2.5 million (INR 128.6 million) as legal fees, SGD 2.45 million (INR 126.1 million) as financial advisory fees and SGD 0.55 million (INR 28.3 million) as tax advisory and other professional fees. Fortis Healthcare Limited (BSE:532843) completed the acquisition of International Hospital Limited and Fortis Health Management Limited from Fortis Global Healthcare Infrastructure Pte Ltd. for INR 46.8 billion on January 15, 2019. The transaction consideration was paid. The transaction is expected to be value accretive resulting in significant improvement in Fortis Healthcare Limited’s operating profitability i.e. EBITDA and cash flows and interest savings.