Malaysia’s sovereign wealth fund Khazanah Nasional Bhd said that it is entering into an agreement with Japan’s Mitsui & Co., Ltd to divest 16 percent of its stake in IHH Healthcare Bhd for MYR8.42 billion in cash, which translates to about US$2 billion.
Khazanah will be divesting about 1.4 billion shares in IHH Healthcare at MYR6 per share, decreasing its shareholding in IHH to 26.05 percent.
This percentage is based on the enlarged share capital of IHH after the completion of the acquisition of 30 percent additional equity interest in Turkish healthcare firm Acibadem Saglik Yatirimlari Holding in October.
Following the divestment, Khazanah will still remain to be a significant shareholder with representation on IHH board. The investment firm will work to provide stability to the shareholder base of IHH in the foreseeable future.
According to Khazanah, the divestment of IHH’s stakes to Mitsui forms an essential part for the restructuring of the sovereign wealth fund’s portfolio. The proceeds raised will be utilized for new investments and capital requirements.
“The divestment is part of Khazanah’s strategy to grow the business that we are invested in and to find the appropriate times and value to create liquidity for our future capital and investment needs,” said Khazanah Managing Director Shahril Ridza Ridzuan.
Apart from IHH Healthcare, Khazanah’s core investments include Telekom Malaysia Bhd, Tenaga Nasional Bhd, CIMB Group, Axiata Group Bhd, Malaysia Airports Holdings, and UEM Sunrise Bhd.
“The transaction clearly shows the confidence of Mitsui in the growth of the IHH platform. Khazanah remains committed to supporting the group and looks forward to the future success of IHH,” Ridzuan added.
On the other hand, Mitsui President and Chief Executive Pfficer Tatsuo Yasunaga said the newly-acquired shares would increase its IHH stake to 32.9 percent.
According to Yasunaga, the decision is made due to the rising demand for medical care associated with the aging population and economic growth, whereas Asian countries continue to face shortage of hospital beds and doctors.
“We will further support IHH’s growth and also pursue opportunities that anticipates high growth such as ancillary services business and other new business in areas such as disease prevention and management, telemedicine, and personalized medicine, by effectively utilising digital transformation and innovative technology,” he said.
IHH is one of Asia’s largest private hospital groups, operating 50 hospiyals with a total of over 12,000 beds in nine countries including Singapore, Malaysia, Turkey, and India.
The deal is expected to be completed by the first quarter of 2019.
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