religare health trust
TRANSCRIPT
Religare Health Trust 2013 , June
STRICTLY PRIVATE AND CONFIDENTIAL
2
• About Religare Health Trust
• Our Ability to Provide Stable & Growing Distributions
• Financial Highlights
3
Religare Health Trust
Issuer Religare Health Trust (“RHT”)
Sponsor Fortis Healthcare Ltd (“Fortis” or the “Sponsor”)
Trustee-Manager Religare Health Trust Trustee Manager Pte Ltd (“TM”)
Sponsor Stake 28.0% Sponsor stake (220.7 m units)
Lock-up of 6 months (100%) and further 6 months (50%) from 19 October 2012
Funds Raised at IPO S$510 mil
567.5 m units (72.0% of total units)
Distribution Yield based on
unit price of S$0.845 (1) 9.7% (Projection Year 2014)
Listing Exchange Mainboard of SGX-ST
Notes:
(1) Projected yields excludes distributions to Sponsor, which has committed to waiving rights to distribution until Mar 31, 2014 in favor of holders of Common Units. Based on unit price as at 12 June 2013 of S$ 0.845
Listed on 19 October 2012
4
Fortis and Religare Partnership
One of the largest healthcare chains
in India and Asia Pacific’s fastest
growing multi vertical healthcare
delivery system
– 73 healthcare delivery facilities
– ~ 10,000 beds
– Presence in 10 countries
– Listed on the BSE and NSE
Part of Religare Enterprises, a
diversified financial services firm
listed on the BSE and NSE
Global multi-boutique asset
management platform with over
US$13.0 billion in Assets Under
Management
RGAM Affiliates
Investment mandate to
acquire healthcare assets
across Asia, Australasia
and global emerging
markets
Leveraging the Complementary Strengths and Expertise of
Fortis and Religare
Unique Healthcare
Offering
Overview of Religare Health Trust
5
Notes:
(1) Independently valued by DTZ in INR as at March 31, 2013 based on S$1 = INR 43.75. Valuation of operating assets based on DCF and Hospital and
Medical Services Agreements (“HMSAs”) as relevant; valuation of greenfield assets based on Market Value.
Fortis Healthcare (“Sponsor”)
Institutional & Public Investors
Trustee-Manager
Current Portfolio
S$773m total valuation (1)
• 11 Clinical Establishments
• 4 Greenfield Clinical
Establishments
• 2 hospitals managed and
operated by RHT
Fortis Operating
Companies
28.0% 72.0%
Ownership Distributions
Service Fee
Clinical Establishment
Services
TM Fees
Acts on behalf of unitholders and
provides management
services
HMSA
Overview
15 year Hospital and Medical Services
Agreements (“HMSA”) with Fortis over the
Initial Portfolio, with extension of further 15
years on mutual agreement
Service Fee
Base Service Fee
Fixed quarterly payments with 3%
escalation per annum
Upward revision for any capex/
expansion
Variable Service Fee
7.5% of the Fortis Operating
Companies’ Operating Income for
each quarter
Sponsor
ROFR
Right of First Refusal (“ROFR”) over
Sponsor’s medical and healthcare
infrastructure located in Asia, Australasia
and emerging markets in the rest of the
world
RHT Structure
Singapore
India
6
17 Quality Assets Geographically Diversified Across India
: RHT Clinical Establishments
: Greenfield Clinical Establishments
: Operating Hospitals
Notes:
(1) No. of beds and installed capacities as of March 31, 2013. Potential bed capacity assumes all planned phases
of development and construction are completed in respect of the Gurgaon Clinical Establishment and the
Greenfield Clinical Establishments
(2) Independently valued by DTZ in INR as at March 31, 2013 based on S$1 = INR 43.75. Valuation of operating
assets based on DCF and Hospital and Medical Services Agreements (“HMSAs”) as relevant; valuation of
greenfield assets based on Market Value.
Initial portfolio valued at
S$773m (1)(2)
11 RHT Clinical
Establishments (S$737m)
4 Greenfield Clinical
Establishments ($31m)
2 hospitals managed and
operated by RHT ($5m)
Approximately 4.1 million
sq ft of built-up area
across 10 states
Sizeable Population
Catchment
Located Close to Major
Transportation Nodes
400 Potential Bed Capacity
Amritsar
Ludhiana
153 Operational Beds 166 Installed Bed Capacity
75 Potential Bed Capacity
Faridabad
Gurgaon
Jaipur
207 Operational Beds 320 Installed Bed Capacity
210 Operational Beds 210 Installed Bed Capacity
450 Installed Bed Capacity 1,000 Potential Bed Capacity
Mumbai, Mulund
Mumbai, Kalyan
236 Operational Beds 567 Installed Bed Capacity
44 Operational Beds 52 Installed Capacity
239 Operational Beds 255 Installed Bed Capacity
Bengaluru, BG Road
Bengaluru, Nagarbhavi
45 Operational Beds 45 Installed Bed Capacity
Bengaluru, Rajajinagar
31 Operational Beds 31 Installed Bed Capacity
Chennai, Malar
Chennai
170 Operational Beds 178 Installed Bed Capacity
45 Potential Bed Capacity
Hyderabad
Noida
Kolkata
New Delhi, Shalimar Bagh
126 Operational Beds 373 Installed Bed Capacity
191 Operational Beds 200 Installed Bed Capacity
130 Operational Beds 350 Installed Bed Capacity
Greater Noida
350 Potential Bed Capacity
3.5%
63.7%
32.9%
7
Diversified Healthcare Portfolio Positioned for Growth
Organic Growth Potential (Number of Beds as of 31 March 2013)
Focus on Provision of High End Healthcare Services (% of Initial Portfolio Valuation)
Substantial Portion of Initial Portfolio Comprise Long Term Lease / Freehold Land (% of Initial Portfolio Valuation)
1,782
3,197
4,617
Current Operational Beds(31 March 2013)
Installed Bed Capacity Potential Bed Capacity
>50 Years Remaining
Lease Life
26.1%
Greenfield
Clinical Establishments
3.9%
Operating
Hospitals
0.7%
High Proportion of Income Generating Clinical Establishments (% of Initial Portfolio Valuation (3))
(1) (1)
Notes:
(1) Installed capacity refers to the maximum number of beds that can be operated at each hospital without further expansion. Potential capacity refers to the maximum number of beds that can operate at each hospital when all stages of
development are completed.
(2) Includes Secondary/Tertiary Services.
(3) Weighted by asset valuation.
<50 Years Remaining
Lease Life
13.7%
Freehold
60.3% RHT Clinical
Establishments
95.4%
Quaternary
Tertiary (2)
Secondary
Weighted Avg Lease
Life of Leasehold
Assets of ~58 Years (3)
+1,415 beds
+1,420 beds
Our distributions are stable and growing stemming from the following:
- Service Fees structure
- Policy of fully hedged distributions for next 12 months, on rolling basis
- Potential for organic & inorganic growth (including ROFR)
- Working with a premium healthcare operator
8
Stable & Growing Distributions
9
$85.2$88.2
64.264.1
24.021.1
Actual Year 2013 Projection Year
2014
Stabilized Distributions, With In-Built Organic Growth
3.5%
Notes:
(1) Excludes income from ancillary services; Financials converted at S$1 = INR 44.04 for FY2013, S$1 = INR46.70 for FY 2014, and exchange rate at the listing date of S$1= INR43.55
(2) Base Service fee excludes accounting straight lining and includes Technological Renewal Fee and are on a full year basis. Base Service Fee from the Gurgaon Clinical Establishment will increase by more than
3.0% per annum until March 31, 2014 when the asset is expected to stabilize.
Service Fee (1)
(S$m)
Base Service Fee (2)
–3.0% p.a. fixed
escalation
– Upward revision
for any capex /
expansion
Variable Service Fee
–7.5% of Fortis
Operating
Companies’
Operating Income
(annualized)
Long term Hospital & Medical Services Agreement 1
Downside Protection, With In-Built Organic Growth 2
Low Gearing 3
HMSAs with Fortis for 15 years, with further 15 year extension by mutual consent
• Base Fee with fixed escalation of 3% p.a. (accounts for c.79.4% of total Service Fee for FY2013)
• Variable Fee of 7.5% of Fortis Operating Companies’ Operating Income
8.9% Low in comparison to peers
100% Distribution Payout 4
• 100% distribution payout over Forecast Year and Projection Year
• Sponsor distribution waiver over Forecast Year and Projection Year
Fully Hedged Distributable Income 5
Distributable income has been hedged for the next payouts –30 September 2013 & 31 March 2014
10
Note
(1) Converted to S$ from INR at S$1 = INR 43.75. (31 march 2013)
RHT has four running projects for capacity expansion, below is the status as of 31st March 2013
Capacity Expansion- Update
Name of Project Nature of Project Additional Bed
Capacity
Total Cost
(S$ m) Project End Date
Project Handover
Date Completion %
Anandpur, Kolkata
Expansion work at 10th &
9th Floor, IVF & PHC.
Addition of 80 Beds.
80 1.65 Jul-13 Jul-13 80%
Rajajinagar, Bengaluru
Leased – Brown Field
expansion. Addition of
20Beds.
20 0.69 Oct-13 Oct-13 50%
Jaipur
Expansion work at 7th Floor,
IVF & PHC. Addition of
21Beds.
21 1.34 In progress Sep-13 65%
BG Road, Bengaluru
Addition of 79 ICU Beds in
two phases. 79 1.95 Oct, 2013 Oct, 2013 -
Total - 200 5.63 - - -
11
Note
(1) Converted to S$ from INR at S$1 = INR 43.75.
Source: Fortis presentation, RHT preliminary prospectus dated 15 October 2012
25% interest free commitment deposit from Sponsor via HMSA to finance development cost
Organic Growth: Greenfields
Healthcare Asset Description
Planned Built-
up Area (sq ft)
Expected
Development
Cost (1)
Potential
Bed
Capacity Project Status
Chennai
Tertiary hospital
Expansion to the Chennai,
Malar Clinical
Establishment
38,072 S$2.6m 45
Currently in planning and
design stage
Filed building plans for
approval
Hyderabad
Tertiary hospital
400,000 S$36.7m 400
Lease agreement currently
being signed
Submitted preliminary project
investment development plan
to Hyderabad Metropolitan
Development Authority
Ludhiana
Quaternary hospital
offering diagnostic, day
care, mother & child and
cosmetic and aesthetic
surgery services
92,318 S$14.8m 75
Currently in planning and
design stage
Filed building plans for
approval
Greater Noida
Tertiary hospital 350,000 S$28.1m 350 Master planning stage
Total - 880,390 S$82.2m 870 -
12
Growth Strategy Supported by Sponsor
Key ROFR Assets (1,120 beds) (1)
Note
(1) Provided that the Relevant Sponsor Entity is a subsidiary that is jointly owned with 3rd parties, ROFR will
be subject to the consent of such 3rd parties. Sponsor shall use its best endeavors to obtain such consent;
Data on ROFR assets as of Dec 31, 2011.
Access to Regional “On-the-Ground” Intelligence
India Vietnam
Singapore
Sri Lanka
Dubai Hong Kong
Escorts Okhla
India
289 Licensed
Beds
India (289 beds)
Singapore (31 beds)
Fortis Colorectal
Hospital
Singapore
31 Licensed Beds
3,714 4,156 4,220
4,830 4,824 5,200 5,320
3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13
14,827
19,074
FY11 FY12
13
Leverage Sponsor’s Expertise and Development Track Record
21.318.8
4.0
7.5
14.5
2.10.90.2
3.2 3.6
FY08 FY09 FY10 FY11 FY12
Operating Revenue EBITDA
36%
Revenue
CAGR Acquired Fortis Malar
in February 2008
Ramp Up At An Acquired Facility: Fortis
Malar, Chennai
(S$m)
5.8
9.3
13.915.8
4.1
11.3
0.72.2
3.53.3
FY08 FY09 FY10 FY11 FY12
Operating Revenue EBITDA
52% Revenue
CAGR
Extracting Value From M&A:
Escorts Amritsar
(S$m)
6.96.4
2.0
3.84.7
1.0
(0.1)0.8
1.81.7
3Q09 3Q10 3Q11 3Q12 4Q12
Operating Revenue EBITDA
4x revenue growth
on annual basis since inception
Performance Of A Greenfield Facility:
Jaipur
(S$m)
Proven Track Record of Maturing Greenfield Assets (1)
Source: Company filings, corporate presentations.
(1) Financial year ending 31 March; Financials converted to S$ at S$1 = INR 44.34.
(INR m)
Fortis’ Historical Indian Hospital Business Performance
28% y-o-y
growth
Quarterly Basis Annual Basis
Average c.6% q-o-q growth
14
Key Drivers of Growth in the Indian Healthcare Market
0.9
4.0
India WHO Recommendation
Lifestyle
Diseases,
18.5%
Others,
81.5%
1,3891,455
1,583
1,7231,875
2011 2012 2013E 2014E 2015E
Growing Affluence
7.8% CAGR GDP Per Capita
(US$)
C
270
320360
410
460
520
2010 2011 2012 2013E 2014E 2015E
F Growing Medical Tourism
Indian Medical Tourism Industry
(‘000 Medical Tourists)
14.0% CAGR
Increasing Health Insurance Coverage E
2010 2015E
25-30% of
expenditures covered
by insurance
40% of expenditures
covered by insurance
% of Healthcare Spend at Corp. Hospitals in Tier 1
Cities Covered by Insurance
Source: F&S Market Research Report. 2012
1,010
1,080
1,173
1,256
2000 2005 2010 2015E
<65 Years >= 65 Yrs Old
A Growing & Aging Population
24.4% India’s Population
(Million)
4.5%
4.8%
5.0%
5.2%
Changing Disease Profile
% of Hospitalisation Cases
D
2001 2012
High Healthcare Demand / Supply Gap B
Hospital Beds per 1,000 Population in 2011
Implied gap of 3.7m beds
Lifestyle
Diseases,
24.0%
Others,
76.0%
US$2.1bn Industry by 2015E
Market and Sector Update
Delhi Development Authority hiked FAR of hospitals by 25-50%. This would have an
impact on the Shalimar Bagh hospital, potentially allowing for an increase in number
of beds
The Indian Hospital sector continues to attract foreign investments. Since 1st of
January 2013, Temasek Holdings invested S$32 million in Bengaluru based cancer
provider HealthCare Global Entreprises. International Finance Corporation and
Sabre Partners invested S$62.2 million between both of them in Global Hospitals.
Sequoia invested S$11 million in ASG Eye Hospital.
Gurgaon CE Launch
Inaugurated On May 1st 2013 by Actor – philanthropist Mr
Salman Khan
Guests of Honor were Dr Pratap Reddy, Chairman Apollo
Hopsitals, Dr Naresh Trehan, CEO Medanta and Salman
Khurshid Cabinet Minister for External Affairs
The facility would have core specialiaites in Oncology, Mother
and Child and Trauma alongside speciailities in Cardiac,
Transplants (Bone Marrow has started) and Neurosciences
The current capacity is 450 beds (Phase I) that will be taken
up to 1000 beds over time. All relevant staff to manage the
450 beds, including doctors and nurses, have been hired.
Collaboration announced with Being Human – an NGO
sponsored by Mr Salman Khan to treat 500 children with heart
ailments free of cost. RHT would also be giving space to the
charity to set up a store at the hospital free of cost as part of
its CSR initiatives.
Dr Virender Sobti
Chief Operating Officer
India
17
Experienced Board and Management Team
Majority independent directors with proven track record in healthcare and funds management
Executive Directors / Management Religare Health Trust
Gurpreet Singh Dhillon
Executive Director & CEO
Peter Rowe
Chairman of Audit and Risk
Management Committee and
Independent Director
Michael Hwang S.C
Independent Director
Eng Meng Leong
Independent Director
Pawanpreet Singh
Executive Director & CFO
Tan Suan Hui
Head of Compliance / IR
Dr. Yogendra Nath Mathur
Lead Independent Director
33 years of relevant experience
Ravi Mehrotra
Executive Chairman
Naveen Bhatia
Head, Finance & Accounts
India
• Financial Highlights
18
19
46.63
44.34 44.34
31.31
26.51 24.69
22.40
39.31 37.94
41.60
26.06
17.14
21.94 21.71
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
Mulund BG Road Noida Jaipur Shalimar Bagh Faridabad Malar
FY 13
FY 1219%
17%
13%
13% 55%
20%
7%
Hospital-wise Revenue (S$ m)
20
72%
77% 79%
86% 83%
66%
60%
77% 73%
80%
86%
70%
77%
60%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Mulund* BG Road Noida Jaipur Shalimar Bagh Faridabad Malar
FY 13
FY 12
* Lower occupancy due to operational capacity expansion/bed additions
Occupancy (%)
Average Occupancy Rate
across entire RHT Portfolio
Q3 Q4
75% 73%
21
ARPOB (S$ m)
0.27
0.24
0.31
0.17
0.22
0.18
0.22 0.22 0.21
0.29
0.16
0.21
0.14
0.21
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
Mulund BG Road Noida Jaipur Shalimar Bagh Faridabad Malar
FY 13
FY 12
Average ARPOB across entire
RHT Portfolio (SGD’000)
Q3 Q4
194 205
Variance between Forecast and Actual ARPOB and Occupancy Rates
22
ARPOB (SGD’000) Occupancy Rate
Prospectus
Forecast 2013
Actual
FY2013
Prospectus
Forecast 2013
Actual
FY2013
Bengaluru 228 240 79% 77%
Malar 196 220 65% 60%
Faridabad 150 180 80% 66%
Jaipur 181 170 82% 86%
Mulund 236 270 72% 72%
Shalimar Bagh 211 220 83% 83%
Noida 289 310 79% 79%
Actual Forecast Variance
S$'000 S$'000 S$'000
Service Fee 46,068 45,473 595
Hospital Income 2,642 2,298 344
Other Income 917 824 93
Total Revenue 49,627 48,595 1,032
Operating Expenses (20,164) (18,315) (1,849)
Net Operating Income 29,463 30,280 (817)
Finance Income 328 9 319
Finance Expenses (1,455) (1,567) 112
Trustee-Manager Fee (2,304) (2,272) (32)
Other Trust Expenses (943) (631) (312)
Foreign exchange gain (87) - (87)
Share of Results of Associates (3,224) (1,885) (1,339)
Issue Costs (7,186) (9,062) 1,876
Profit Before Deemed disposal
of associates, change in fair
value of financial derivatives 14,592 14,872 (280)
Deemed disposal of associates (12,134) (10,739) (1,395)
Loss on change in fair value of
financial derivative (1,799) - (1,799)
Loss Before Taxes 659 4,133 (3,474)
Taxes (5,939) (5,974) 35
Net Loss (5,280) (1,841) (3,439)
Financial Results for year ended 31 March 2013 (against Forecast)
Unitholders Distribution as at 31 March 2013
24
Actual Forecast Under/(Over)
S$'000 S$'000 S$'000
Net Loss (5,280) (1,841) (3,439)
Distribution Adjustments:
Impact of non-cash Straight Lining (6,612) (6,464) (148)
Technology Renewal Fee (310) (301) (9)
Depreciation and Amortisation 6,520 5,241 1,279
Amortisation of debt arrangement
fee 250 295 (45)
Trustee-Manager Fees payable in
Units 1,152 1,111 41
Foreign exchange gain 87 - 87
Unrealised gain on financial asset (108) - (108)
Loss on change in fair value of
financial derivative 1,799 - 1,799
Deferred Tax Expenses (264) 367 (631)
Share of results of associates 3,224 1,885 1,339
Deemed disposal of associates 12,134 10,739 1,395
Issue expenses 7,186 9,062 (1,876)
Total Distributable Income 19,778 20,094 (316)
(Loss)/distributions attributable
to:
Pre-Listing Unitholder (367) (445) 78
Post-Listing Unitholders 20,145 20,539 (394)
19,778 20,094 (316)
25
Hedging - Foreign currency exposure
Particulars
Minimum Hedging (percentage to total exposure)
Up to first 18 months 100% on 6 month rolling basis
100% Hedging done for the forthcoming distributions payable for the 6 months ending Sep 2013 and Mar 2014
INR to be paid by FGHIPL
Contracted
rate
SGD to be delivered by
bank Settlement
1,169,250,000 46.77 25,000,000 15-Nov-13
1,194,750,000 47.79 25,000,000 15-May-14
Forward contracts already entered into
The average contracted rate for FY 14 is 47.28.
Market Performance of RHT against comparable peers (rebased 19 Oct 2012 to 12 June 2013)
90%
95%
100%
105%
110%
115%
120%
125%
130%
135%
140%
19 Oct 12 12 Nov 12 04 Dec 12 27 Dec 12 18 Jan 13 08 Feb 13 05 Mar 13 26 Mar 13 17 Apr 13 09 May 13 31 May 13
RHT First REIT Plife REIT AIT FTSE REIT
Name Code Total Volume* Daily Average Volume*
Religare Health Trust RHT 707,889,000 4,452,132
Ascendas India Trust AIT 199,711,000 1,256,044
First Real Estate Investment Trust First REIT 138,303,000 869,830
Parkway Life REIT Plife REIT 71,101,000 447,176
* For the period 10 Oct 2012 to 12 June 2013
Distribution Yield for FY 2013
27
9.2
7.4 7.2 7.1 6.8 6.7 6.7 6.6 6.5 6.3 6.3 6.2 6.0 6.0 5.9 5.8 5.7 5.6 5.6 5.5 5.5 5.4 5.3 5.3 5.3 5.2
4.4
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
RHT's 2013 Distribution yield stands outs
Wtd Avg: 5.91
Source: Bloomberg consesensus estimates, Standard Chartered Research estimates for covered companies (*not under SCB coverage)
Standard Chartered Research Report dated 10 June 2013
Gearing % (Total Debt / Total Assets)
28
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
RHT has the lowest gearing (%) amongst its peers
Source: Standard Chartered Research Report 10 June 2013, (*Not under SCB coverage)
Wtd Avg: 32.8
SREITs – Premium/Discount to NAV
60
48
32 32 30 26 26
21 21 20 18 17 13 12 11 11 11 10
5 3 2
-2 -2 -5 -12
-17 -18 -21 -27
-56
-73 -80
-60
-40
-20
0
20
40
60
80
29
30
Financial Highlights
Notes:
(1) Financials converted at S$1 = INR44.04 for FY2013, S$1 = INR46.70 for FY 2014, and exchange rate at the listing date of S$1= INR43.55;.
(2) Includes straight lining of Base Service Fee.
(3) DPU calculated based on unit price traded on 28 May 2013
102.3102.5
5.25.91.92.0
Actual Year 2013
(annualised)
Projection Yr 2014
Service Fee Hospital Income Other Income
Revenue (1) (S$m)
DPU Yield (1)
44.8
46.6
Actual Year 2013
(annualised)
Projection Yr 2014
110.4 109.4
Distributable Income (1)
(S$m)
9.4% 9.7%
3.06%
Gearing: 8.9%
Sponsor Waiver
Average NOI margin: 59%
6.8% 7.0%
2.6% 2.7%
Actual Yr 2013(ann.)
Projection Yr 2014
Appendix
32
0.5% - 1.0% of acquisition price
0.5% of the sale price (Divestment
to 3rd party)
No divestment fee (Divestment to
Sponsor)
Performance based management fees designed to align Management’s interests with Unitholders
Base fee Performance fee Acquisition / divestment fee
0.4% p.a. of the value of the
Trust Property
50% to be paid in Units (1)
4.5% p.a. of Distributable Income (2)
50% to be paid in Units (1)
2.0% of total development project costs
Payable in the form of cash and/ or units
Development fee Asset management fee
Fee Structure
1.0% of gross revenue
Paid quarterly in arrears
No asset management fee paid for assets
operated by Sponsor
Note
(1) For the Forecast Year 2013 and Projection Year 2014
(2) Distributable Income means the distributable amount determined by the Trustee-Manager in accordance with the terms of the Trust Deed
to be distributable for the relevant distribution period (pro-rated if applicable based on the number of months the relevant financial quarter
bears to such distribution period)
Efficient Trust Structure
Note:
(1) Promoters comprise Malvinder Mohan Singh, Shivinder Mohan Singh and their associates.
India Singapore
Acts on behalf of Unitholders and provides
management services Distributions
Others New Unitholders Trustee-Manager
~19% ~81%
Hospital and Medical Services Agreements
(“HMSAs”)
Fortis Operating Companies
(“FOCs”) CCD Interest payments
and dividends
Investments in Compulsory Convertible Debentures
(“CCDs”) and equity shares
TM Fees
Distributions
100%
Hospital operating capabilities
Ownership of medical and healthcare infrastructure facilities
Dividends 100%
28.0%
72.0%
Promoters (1)
Fortis Global Healthcare
Infrastructure Service Fees
Clinical Establishment
Services Hospital Services
Companies (“HSCs”)
Fortis Health International Limited
(Mauritius)
100%
Dividends
33
34
Term of
Agreement
15 years with option to extend by another 15 years by mutual
consent
Primary
Obligations of
HSCos
Making available and maintaining the Clinical Establishments
Provision of outpatient services
Provision of radio diagnostic services
Primary
Obligations of
FOCs
Provision of healthcare services at the Clinical Establishments
Pay to HSCos the Services Fees and Commitment Deposits
Services Fee
Base Service Fee
– Increased by 3% p.a.
– Upward revision for any capex / expansion
– Provision for capex to replace medical equipment
(“Technology Renewal Fee”) added to Base Fee (2)
– HSCos entitled to request for an advance of up to 60% of the
Base Service Fee
Variable Service Fee
– 7.5% of the operating income of the FOC
Commitment
Deposits
FOC to pay to HSCo 25% of cost for expansions of capacity /
modification of Fortis Hospitals as an interest free refundable
commitment deposit
Income Secured Through Long Term Working Agreements
Mechanics of the HMSA Key Terms of the HMSA
Services Fees
Fortis Operating Company
Clinical Establishment
Operated by
Hospital Services Company
Ownership
Services
B
A
C
Ancillary Services
Ownership Earnings
Commitment Deposits
D
+
Public
Source: TM Notes: (1) Fortis has signed commitment agreements to enter into similar HMSAs for the greenfield healthcare infrastructure assets. (2) Technology Renewal Fee will be paid into a Technology Renewal Fund to be maintained by Fortis.
A
B
C
D
Prior to listing, the Hospital Services Companies (“HSCos”) will enter into Hospital and Medical Services Agreements (“HMSAs”) with the Fortis Operating Companies (“FOCs” ) to operate the healthcare infrastructure assets (1).