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S$55M loan default could prompt RHT Health to repay S$238M of debt immediately

RHT Health Trust is in discussions with its lenders and advisers after an event of default related to a S$55 million loan was breached, putting the company in a position where it could be obligated to repay immediately S$237.8 million of outstanding debt, excluding interests.

The breach happened when the collective stake of promoters Malvinder Mohan Singh and Shivinder Mohan Singh in the Singapore-listed trust's controlling shareholder, Fortis Healthcare Ltd., was reduced to 8.84%. Under the terms and conditions of the S$55 million loan provided by United Overseas Bank Ltd. and the Singapore branch of Siemens Bank GmbH, the Fortis Healthcare stake from the two are not to fall below 35%.

RHT Health Trust Manager Pte. Ltd., the trust's trustee-manager, said the breach also triggers cross-defaults in other debt and debt offerings of the trust. Affected borrowings include the 480 million-Indian-rupee loan secured from IndusInd Bank Ltd., the U.S.-dollar equivalent of the S$53 million loan provided by IndusInd and IFSC GIFT City Branch, and RHT Health's outstanding 4.50% fixed-rate notes due July that were issued at an aggregate amount of S$120 million.

The company said it will update unit holders and noteholders on any material developments.

As of Feb. 20, US$1 was equivalent to 64.91 Indian rupees and S$1.32.