RHT HealthTrust (formerly: Religare Health Trust)

[Nick]

Omg! i just saw something that religare has in common with indiabulls. It has 4 hospitals still under development, very very similar to indiabulls, when indiabulls was listed, most of its investment properties were still under development. Dont take this too lightly, under development still mean that construction cost has to be accounted for and it will most likely take on bank debt to pay for the construction. Suddenly, you may see religare being more leveraged.

And if after development, the facilites get underutilised, you start to get lousy profits, maybe even losses

The key difference between Religare and Indiabulls is that the former IPO'ed with a portfolio of 11 income generating hospitals while the latter didn't have a single income generating asset.

[KopiKat]

Just saw the prospectus and the exchange rate information within the prospectus.

Firstly,
"The Trustee-Manager intends to distribute 100.0% of the residual cash flows generated by the RHT Group (“Distributable Income”) for the period from the Listing Date to 31 March 2014. Thereafter, the Trustee-Manager intends to distribute at least 90.0% of its Distributable Income, with the actual level of distribution to be determined at the Trustee-Manager’s absolute discretion."

The high yield being touted as a selling point is due to the 100% of residual cash flows, which brings a question to mind, that Nick has brought up in the issues of Shipping Trusts and KGT. Does the manager plan to retain any income against depreciation?

It looks good however that the manager states that residual income is derived after paying for debt, something that some shipping trusts do not.

Most likely, only if it's imposed by the banks... At this stage of their life, they'll be planning to borrow more money for their 4 Greenfield developments and I doubt that they'll be planning to have any loan repayment schedule unless imposed by the banks when they reach certain Gearing level - Banks are also getting smarter after seeing what happened at the Shipping Trusts

On exchange rate, let's assume that the INR/SGD rate slowly increases from 45 to 65
Assuming 9.1% yield at 0.90 is true, that's estimating 0.0819 SGD dividends, or 36.855 INR
Assume this stays constant, and INR/SGD indeed reaches 65, then that would be 0.0567 SGD

At 0.90, this is 6.3%
At 0.80, this is 7.1%
At 0.70, this is 8.1%
At 0.60, this is 9.45%

Let's take a look at my FOREX fears using a-iTrust slides,

[Image: sxocuo.jpg][Image: 15hfiiv.jpg]

Despite a CAGR of 16% for Net Property income in INR, the DPU had gone lower as INR had weakened by ~40% since their IPO.

Perhaps this one will be different as Different Assets? Also, different sponsor + mgr who're India based and ought to know their own mkt better? But, as I'd posted earlier, their Share Price performance is not giving me a lot of confidence....

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Omg! i just saw something that religare has in common with indiabulls. It has 4 hospitals still under development, very very similar to indiabulls, when indiabulls was listed, most of its investment properties were still under development. Dont take this too lightly, under development still mean that construction cost has to be accounted for and it will most likely take on bank debt to pay for the construction. Suddenly, you may see religare being more leveraged.

And if after development, the facilites get underutilised, you start to get lousy profits, maybe even losses

The key difference between Religare and Indiabulls is that the former IPO'ed with a portfolio of 11 income generating hospitals while the latter didn't have a single income generating asset.

From Pg13 of IPO Prospectus, the total estimated for the 4 Greenfield projects ~$82.2Mil from Q2FY13 (start of devt) till Q4FY16. That should bring Gearing closer to 20%. In the meantime, as mentioned by Nick, the rest of the assets ought to be generating income to pay for the forecasted DPU.

[Greenrookie]

Hi all, I have question. What happens in the event that the sponsor goes bankrupt? The trust itself is rather lightly geared, but the sponsor is not. Will the trust be forced to liquidated? Although what will most likely happen is that the sponsor will try to offload those heavily geared hospitals to the trust and shift the debts to the trust. But given that the trust has a self imposed 60% gearing cap, and it gearing is in the single digit, I will not be too worry yet? Any seniors any comments. Appreciate your response and thanks in advance.

[Drizzt]

i think in that event, they may transfer the trust to another manager. The sponsor, which should hold a large portion of shares may be forced to sell of their portion of holdings.

[Nick]

Share price has stabilized at 80.0 cents recently giving rise to a dividend yield of 10% for FY 2013 (annualized) and FY 2014. The real dividend yield (excluding sponsor waiver) is approximately 7.2%.

The management has been buying shares from open market post IPO -

1) Hwang Sydney Michael purchased 0.5 million shares @ $0.890 and 0.2 million shares @ $0.770,

2) Gurpreet Singh Dhillon purchased 0.3 million shares @ $0.775

3) Ravi Mehrotra purchased 1.0 million shares @ $0.80875

4) Malvinder Mohan Singh purchased 0.5 million shares @ $0.8075

(Not Vested)

[Greenrookie]

Potential investors should look at pg 170 onwards of their prospectus carefully. I was very interested in the trust, until I read about the "issues concerning the initial portfolio.

Close to 40% of the assets have 1 issue or another in terms of approvals, litigations, etc.

Also, this is one of the most draining prospectus that i have ever read, its like a endless network of relationships, which after studying for few days, create more questions than answers. Singapore companies are easier to understand

I hope i will get a better gasp of their business over the next few weeks.

(Not vested)

[Nick]

Share price has stabilized at 80.0 cents recently giving rise to a dividend yield of 10% for FY 2013 (annualized) and FY 2014. The real dividend yield (excluding sponsor waiver) is approximately 7.2%.

The management has been buying shares from open market post IPO -

1) Hwang Sydney Michael purchased 0.5 million shares @ $0.890 and 0.2 million shares @ $0.770,

2) Gurpreet Singh Dhillon purchased 0.3 million shares @ $0.775

3) Ravi Mehrotra purchased 1.0 million shares @ $0.80875

4) Malvinder Mohan Singh purchased 0.5 million shares @ $0.8075

(Not Vested)

Hwang Sydney Michael purchased a further 0.1 million shares @ $0.80.

In total insiders have added 2.6 million shares since it IPO'ed.

(Not Vested)

[Stocker]

Is it reasonable to say that they had cashed out part of their holdings from the IPO and now they are only using some of the proceeds to buy back.

[Nick]

Is it reasonable to say that they had cashed out part of their holdings from the IPO and now they are only using some of the proceeds to buy back.

True for the owner of the Sponsor. Not sure whether it applies to the 2 executive directors and definitely not applicable to the sole ID there.

[Stocker]

So far how many coroperate management of foreign countries, from PRC , HK , India , Indonesia...etc .. really come here to create shareholder values for the investors ? ........................