Religare Health Trust 2013 , June
34
Religare Health Trust 2013 , June STRICTLY PRIVATE AND CONFIDENTIAL
description
Religare Health Trust 2013 , June. STRICTLY PRIVATE AND CONFIDENTIAL. About Religare Health Trust Our Ability to Provide Stable & Growing Distributions Financial Highlights. Religare Health Trust. Listed on 19 October 2012. Notes : - PowerPoint PPT Presentation
Transcript of Religare Health Trust 2013 , June
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 Stake28.0% Sponsor stake (220.7 m units)Lock-up of 6 months (100%) and further 6 months (50%) from 19 October 2012
Funds Raised at IPOS$510 mil567.5 m units (72.0% of total units)
Distribution Yield based on unit price of $0.965 8.4% (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 28 May 2013
Listed on 19 October 2012
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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– ~ 12,000 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 AffiliatesInvestment 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
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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%
OwnershipDistributions
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 FeeFixed quarterly payments with 3%
escalation per annumUpward revision for any capex/
expansion
Variable Service Fee7.5% 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
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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 CapacityOperational: 4QFY2016
Amritsar
Ludhiana
153 Operational Beds166 Installed Bed Capacity
75 Potential Bed CapacityOperational: 2QFY2015
Faridabad
Gurgaon
Jaipur207 Operational Beds320 Installed Bed Capacity
210 Operational Beds210 Installed Bed Capacity
450 Installed Bed Capacity1,000 Potential Bed Capacity
Mumbai, Mulund
Mumbai, Kalyan
236 Operational Beds567 Installed Bed Capacity
44 Operational Beds52 Installed Capacity
239 Operational Beds255 Installed Bed Capacity
Bengaluru, BG Road
Bengaluru, Nagarbhavi45 Operational Beds45 Installed Bed Capacity
Bengaluru, Rajajinagar31 Operational Beds31 Installed Bed Capacity
Chennai, Malar
Chennai
170 Operational Beds178 Installed Bed Capacity
45 Potential Bed CapacityOperational: 1QFY2015
Hyderabad
Noida
Kolkata
New Delhi, Shalimar Bagh
126 Operational Beds373 Installed Bed Capacity
191 Operational Beds200 Installed Bed Capacity
130 Operational Beds350 Installed Bed Capacity
Greater Noida350 Potential Bed CapacityOperational: 4QFY2016
3.5%
63.7%
32.9%
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Diversified Healthcare Portfolio Positioned for GrowthOrganic 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)
Current Operational Beds (31 March 2013)
Installed Bed Capacity Potential Bed Capacity
1,782
3,197
4,617
>50 Years Remaining Lease Life
26.1%
GreenfieldClinical 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
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Our distributions are stable and growing stemming from the following:
- Service Fees structure
- Policy of fully hedged distributions for next 12 months
- Potential for organic & inorganic growth (including ROFR)
- Working with a premium healthcare operator
STABLE & GROWING DISTRIBUTIONS
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$85.2$88.2
64.264.1
24.021.1
Actual Year 2013 Projection Year2014
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 Agreement1
Downside Protection, With In-Built Organic Growth2
Low Gearing3
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 Payout4
• 100% distribution payout over Forecast Year and Projection Year
• Sponsor distribution waiver over Forecast Year and Projection Year
Fully Hedged Distributable Income5
Distributable income has been hedged for the next payouts –30 September 2013 & 31 March 2014
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Capacity Expansion- Update
RHT has four running projects for capacity expansion, below is the status as of 31st March 2013
Name of Project Anandpur, Kolkata Rajajinagar, Bengaluru Jaipur BG Road, Bengaluru
Nature of Project Expansion work at 10th & 9th Floor, IVF & PHC. Addition of 80 Beds.
Leased – Brown Field expansion. Addition of 20Beds.
Expansion work at 7th Floor, IVF & PHC. Addition of 21Beds.
Addition of 79 ICU Beds in two phases.
Total Cost (INR m) 72.40 30.0 58.5 85.4
Project End Date July 2013 October 2013 In progress Oct, 2013
Project Handover Date July 2013 October 2013 September 2013 Oct, 2013
Completion % 80% 50% 65% -
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Note (1) Converted to S$ from INR at S$1 = INR 43.55.
Source: Fortis presentation, RHT preliminary prospectus dated 15 October 2012
25% interest free commitment deposit from Sponsor via HMSA to finance development cost
In-Built Development Pipeline; Sponsor’s Interests Aligned
Healthcare Asset DescriptionPlanned 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$82.2m 870 -
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Growth Strategy Supported by Sponsor
Key ROFR Assets (1,120 beds) (1)
Note (1) Provided that the Relevant Sponsor Entity is a subsidiary that is jointly owned with 3rd parties, ROFR will
be subject to the consent of such 3rd parties. Sponsor shall use its best endeavors to obtain such consent; Data on ROFR assets as of Dec 31, 2011.
Access to Regional “On-the-Ground” Intelligence
IndiaVietnam
Singapore
Sri Lanka
Dubai Hong Kong
Vietnam (800 beds)
Hoan My Da NangVietnam200 Licensed Beds
Hoan My Saigon Phan Xich Long Vietnam200 Licensed Beds
Hoan My Da LatVietnam200 Licensed Beds
Hoan My Can ThoVietnam150 Licensed Beds
Hoan My Minh HaiVietnam50 Licensed Beds
Escorts OkhlaIndia289 Licensed Beds
India (289 beds)
Singapore (31 beds)Fortis Colorectal HospitalSingapore31 Licensed Beds
3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13
3,7144,156 4,220
4,830 4,8245,200 5,320
FY11 FY12
14,827
19,074
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Leverage Sponsor’s Expertise and Development Track Record
21.318.8
4.0
7.5
14.5
2.10.9 0.23.2 3.6
FY08 FY09 FY10 FY11 FY12
Operating Revenue EBITDA
36% Revenue
CAGRAcquired Fortis Malar
in February 2008
Ramp Up At An Acquired Facility: Fortis Malar, Chennai(S$m)
5.8
9.3
13.915.8
4.1
11.3
0.72.2
3.53.3
FY08 FY09 FY10 FY11 FY12Operating Revenue EBITDA
52% Revenue CAGR
Extracting Value From M&A: Escorts Amritsar(S$m)
6.96.4
2.0
3.84.7
1.0(0.1)
0.81.81.7
3Q09 3Q10 3Q11 3Q12 4Q12
Operating Revenue EBITDA
4x revenue growth on annual basis since inception
Performance Of A Greenfield Facility: Jaipur(S$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$1 = INR 44.34.
(INR m)Fortis’ Historical Indian Hospital Business Performance
28% y-o-y growth
Quarterly Basis Annual Basis
Average c.6% q-o-q growth
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Key Drivers of Growth in the Indian Healthcare Market
0.9
4.0
India WHO Recommendation
Lifestyle Diseases,
18.5%
Others, 81.5%
1,389 1,4551,583
1,7231,875
2011 2012E 2013E 2014E 2015E
Growing Affluence
7.8% CAGRGDP Per Capita (US$)
C
270320
360410
460520
2010 2011E 2012E 2013E 2014E 2015E
F Growing Medical Tourism Indian Medical Tourism Industry(‘000 Medical Tourists)
14.0% CAGR
Increasing Health Insurance CoverageE
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.
1,0101,080
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 2012E
High Healthcare Demand / Supply GapBHospital 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 government has clarified its stance on Put and Call Options, stating that regulation drafted by SEBI on allowing these options will be approved. This was one of the risk factors in RHT’s prospectus
RBI has over the last few monetary policy meetings lowered interest by .75 bps stating that Inflation being lower than 5% also gives it to reduce rates further at the next monetary policy meeting on June 17th
The Indian Hospital sector continues to attract foreign investments. Since 1st of January 2013, Temasek invested S$32 million in a Bangalore based cancer hospital group, IFC and Sabre invested S$51 million in Global Hospitals, Sequoia invested S$11.5 million in ASG Eye Hospitals
Gurgaon CE Launch
Inaugurated On May 1st 2013 by Actor – philanthropist Mr Salman Khan
Guests of Honor were Dr Pratap Reddy, Chairman Apollo Hopsitals, Dr Naresh Trehan, CEO Medanta and Salman Khurshid Cabinet Minister for External Affairs
The facility would have core specialiaites in Oncology, Mother and Child and Trauma alongside speciailities in Cardiac, Transplants (Bone Marrow has started) and Neurosciences
The current capacity is 450 beds (Phase I) that will be taken up to 1000 beds over time. All relevant staff to manage the 450 beds, including doctors and nurses, have been hired.
Collaboration announced with Being Human – an NGO sponsored by Mr Salman Khan to treat 500 children with heart ailments free of cost. RHT would also be giving space to the charity to set up a store at the hospital free of cost as part of its CSR initiatives.
Dr Virender SobtiChief Operating Officer
India
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Experienced Board and Management Team Majority independent directors with proven track record in healthcare and funds management
Executive Directors / Management Religare Health Trust
Gurpreet Singh DhillonExecutive Director & CEO
Chey Chor WaiChairman of Audit and Risk Management Committee and Independent Director
Michael Hwang S.CIndependent Director
Peter Joseph Seymour RoweIndependent Director
Pawanpreet SinghExecutive Director & CFO
Tan Suan HuiHead of Compliance / IR
Dr. Yogendra Nath Mathur Lead Independent Director
33 years of relevant experience
Ravi MehrotraExecutive Chairman
Naveen BhatiaHead, Finance & Accounts
India
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• Financial Highlights
19
Mulund BG Road Noida Jaipur Shalimar Bagh Faridabad Malar0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.0046.63
44.34 44.34
31.31
26.5124.69
22.40
39.3137.94
41.60
26.06
17.14
21.94 21.71
FY 13
FY 1219%
17%
13%13%55%
20%
7%
Hospital-wise Revenue (S$ m)
20
Mulund* BG Road Noida Jaipur Shalimar Bagh Faridabad Malar0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
72%
77% 79%
86%83%
66%
60%
77%73%
80%
86%
70%
77%
60%
FY 13
FY 12
* Lower occupancy due to operational capacity expansion/bed additions
Occupancy (%)
21
ARPOB (S$ m)
Mulund BG Road Noida Jaipur Shalimar Bagh Faridabad Malar0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.27
0.24
0.31
0.17
0.22
0.18
0.220.22 0.21
0.29
0.16
0.21
0.14
0.21
FY 13
FY 12
Average ARPOB and Occupancy Rate across entire RHT Portfolio
Q3 Q4
ARPOB (SGD’000) 194 205
Occupancy 75% 73%
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Variance between Forecast and Actual ARPOB and Occupancy Rates
ARPOB (SGD’000) Occupancy Rate
Prospectus Forecast 2013
ActualFY2013
Prospectus Forecast 2013
ActualFY2013
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 VarianceS$'000 S$'000 S$'000
Service Fee 46,068 45,473 595
Hospital Income 2,642 2,298 344
Other Income 917 824 93
Total Revenue 49,627 48,595 1,032
Operating Expenses (20,164) (18,315) (1,849)
Net Operating Income 29,463 30,280 (817)
Finance Income 328 9 319
Finance Expenses (1,455) (1,567) 112
Trustee-Manager Fee (2,304) (2,272) (32)
Other Trust Expenses (943) (631) (312)
Foreign exchange gain (87) - (87)
Share of Results of Associates (3,224) (1,885) (1,339)
Issue Costs (7,186) (9,062) 1,876 Profit Before Deemed disposal of associates, change in fair value of financial derivatives 14,592 14,872 (280)
Deemed disposal of associates (12,134) (10,739) (1,395)Loss on change in fair value of financial derivative (1,799) - (1,799)
Loss Before Taxes 659 4,133 (3,474)
Taxes (5,939) (5,974) 35
Net Loss (5,280) (1,841) (3,439)
Financial Results for year ended 31 March 2013 (against Forecast)
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Unitholders Distribution as at 31 March 2013
Actual Forecast Under/(Over)S$'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)
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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 3 Distributions
INR to be paid by FGHIPLContracted rate
SGD to be delivered by bank Settlement
1,140,875,000 45.635 25,000,000 15-May-13
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.
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Market Performance of RHT against comparable peers (rebased 19 Oct 2012 to 28 May
2013)
Name Total Volume * Daily Average Volume *
Religare Health Trust 669,759,000 4,525,399
Ascendas India Trust 187,544,000 1,267,189
First Real Estate Investment Trust 118,297,000 799,304
Parkway Life REIT 64,238,000 434,041
* For the period 19 Oct 2012 to 28 May 2013
19 Oct 1222 Oct 1223 Oct 1224 Oct 1225 Oct 1229 Oct 1230 Oct 1231 Oct 1201 Nov 1202 Nov 1205 Nov 1206 Nov 1207 Nov 1208 Nov 1209 Nov 1212 Nov 1214 Nov 1215 Nov 1216 Nov 1219 Nov 1220 Nov 1221 Nov 1222 Nov 1223 Nov 1226 Nov 1227 Nov 1228 Nov 1229 Nov 1230 Nov 1203 Dec 1204 Dec 1205 Dec 1206 Dec 1207 Dec 1210 Dec 1211 Dec 1212 Dec 1213 Dec 1214 Dec 1217 Dec 1218 Dec 1219 Dec 1220 Dec 1224 Dec 1226 Dec 1227 Dec 1228 Dec 1231 Dec 1202 Jan 1303 Jan 1304 Jan 1307 Jan 1308 Jan 1309 Jan 1310 Jan 1311 Jan 1314 Jan 1315 Jan 1316 Jan 1317 Jan 1318 Jan 1321 Jan 1322 Jan 1323 Jan 1324 Jan 1325 Jan 1328 Jan 1329 Jan 1330 Jan 1331 Jan 1301 Feb 1304 Feb 1305 Feb 1306 Feb 1307 Feb 1308 Feb 1313 Feb 1314 Feb 1315 Feb 1318 Feb 1319 Feb 1320 Feb 1321 Feb 1322 Feb 1325 Feb 1326 Feb 1327 Feb 1328 Feb 1301 Mar 1304 Mar 1305 Mar 1306 Mar 1307 Mar 1308 Mar 1311 Mar 1312 Mar 1313 Mar 1314 Mar 1315 Mar 1318 Mar 1319 Mar 1320 Mar 1321 Mar 1322 Mar 1325 Mar 1326 Mar 1327 Mar 1328 Mar 1301 Apr 1302 Apr 1303 Apr 1304 Apr 1305 Apr 1308 Apr 1309 Apr 1310 Apr 1311 Apr 1312 Apr 1315 Apr 1316 Apr 1317 Apr 1318 Apr 1319 Apr 1322 Apr 1323 Apr 1324 Apr 1325 Apr 1326 Apr 1329 Apr 1330 Apr 1302 May 1303 May 1306 May 1307 May 1308 May 1309 May 1310 May 1313 May 1314 May 1315 May 1316 May 1317 May 1320 May 1321 May 1322 May 1323 May 1327 May 1328 May 1390%
95%
100%
105%
110%
115%
120%
125%
130%
135%
140%
RHT First REIT Plife REIT AIT FTSE REIT
28
Distribution Yield for FY 2013
ASHTRHT
CRT*
CREITLM
RT
CACHE AITPCRT
AAREITMIN
TART
CDREITFIR
T*
CRCT*
SGREITFEHT
AREITMLT
KREITFCOT
SUNFCT CT
MAGICCCT
MCTFRT
PREIT*0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.08.3 8.2
7.06.6
6.2 6.2 6.2 6.1 6.0 6.05.7 5.6 5.6 5.5 5.5 5.5 5.3 5.3 5.2 5.1 5.0 5.0 4.9 4.9 4.8 4.7
4.34.0
RHT's 2013 Distribution yield stands outs
Wtd Avg: 5.33
Source: Bloomberg consensus estimates, Standard Chartered Research estimates for covered companies (*not under SCB coverage)Standard Chartered Research Report dated 23 May 2013
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Yield and P/B Comparison
Sources : Standard Chartered Research Report dated 23 May 2013, OCBC Investment Research Weekly SREITs dated 13 May 2013
RHT gearing figure based on actuals
AIT Plife First Reit RHT
6.2% 4.0% 5.6% 8.2%
21.0%
33.0%39.0%
8.9%
1.16 X1.25 X
1.70 X
1.09 X
Yield Gearing ratio P/B
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)
44.846.6
Actual Year 2013(annualised)
Projection Yr 2014
110.4 109.4
Distributable Income (1)
(S$m)
8.2%8.4%
2.44%
Gearing: 8.9%
Sponsor Waiver
Average NOI margin: 59%
5.9% 6.0%
2.3%2.4%
Actual Yr2013 (ann.)
Projection Yr2014
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 ofUnitholders and provides
management servicesDistribution
s
Others New Unitholders Trustee-Manager
~19%~81%
Hospital and Medical Services Agreements (“HMSAs”)
Fortis Operating Companies
(“FOCs”) CCD Interest paymentsand dividends
Investments in CompulsoryConvertible Debentures
(“CCDs”) and equity shares
TM Fees
Distributions
100%
Hospital operating capabilities
Ownership of medical andhealthcare infrastructure facilities
Dividends 100%
28.0%
72.0%
Promoters (1)
Fortis Global Healthcare
InfrastructureService 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 OperatingCompany
Clinical Establishment
Operated by
Hospital Services Company
Ownership
Services
B
AC
Ancillary Services
Ownership Earnings
Commitment Deposits
D+
Public
Source: TMNotes:(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).
