KUALA LUMPUR – Singapore-based sovereign wealth fund GIC will invest 750 million ringgit ($ 242 million) ($ 180 million) in Sunway Berhad’s health care business, the Malaysian conglomerate announced on Wednesday June 23.
GIC will purchase a 16 percent stake in an agreement that values Sunway Healthcare at approximately 4.69 billion ringgits ($ 1.13 billion), more than half of Sunway’s market value of 8.78 billion ringgits.
“GIC’s FDI confirms Sunway’s confidence in the growth of its healthcare business and the long-term potential of the Malaysian healthcare industry,” said Sunway in the statement shared with GIC.
The investment amount will be paid to Sunway in four tranches over three years. GIC is entitled to an annual dividend of 3 percent of the accumulated amount invested, according to a share registration.
“If we don’t need the money yet, we’d better take it later. We have discussed very carefully with GIC and both parties agree that this timeframe is good, ”said Chairman Jeffrey Cheah at a virtual press conference.
Reuters reported earlier this week that Sunway, which also operates real estate development, construction and education companies, has agreed to sell approximately 15 percent of the shares in its healthcare unit to GIC for 700 to 800 million ringgit.
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Sunway Healthcare operates two tertiary hospitals with a total capacity of over 800 beds and plans to build up to six more hospitals.
Expansion plans should bring capacity to about 3,000 beds in three to four years, with a plan to go public in six to eight years, Sunway said.
Chong Chang Choong, chief financial officer, said the immediate investment needs for the expansion would be around 2 billion ringgits.
“Almost 40 percent of the need will be funded by GIC’s equity injection, although it will come in over the next three to three and a half years,” he said.
Maybank Investment Bank acted as sole financial advisor to Sunway on the transaction.
