GIC acquires 16% stake in Sunway Healthcare

by S BIRRUNTHA / pic source:

SINGAPORE’S sovereign wealth fund GIC Pte Ltd acquires 16% stake in Sunway Bhd’s healthcare business, Sunway Healthcare Holdings Sdn Bhd for RM750 million.

Sunway Group founder and chairman Tan Sri Jeffrey Cheah (picture) said the agreement, which values Sunway Healthcare at close to RM4.69 billion, arrived at on a willing-buyer-willing-seller basis following evaluation of proposals from various domestic and international investment funds, sovereign wealth funds and private equity firms.

“I am confident that the Sunway-GIC partnership will further enhance Sunway Healthcare’s value and together, we can realise the full potential of our healthcare business,” he said in a special press conference held virtually yesterday.

According to Cheah, the investment will be utilised to partly fund Sunway Healthcare’s expansion plans, in which it aims to become a leading integrated private healthcare group with a network of hospitals and healthcare services in Malaysia and Singapore.

The exercise also allows Sunway to potentially list its healthcare unit in the local stock exchange in the next six to eight years.

“We plan to construct six more hospitals in the future. The plan is on track and we will deliver on time. Hopefully, in a couple of years down the road, we can do an IPO,” he said.

Sunway Healthcare currently operates two tertiary hospitals with combined capacity in excess of 800 beds and more than 400 consultant specialists.

The expansion is expected to increase the capacity to 3,000 beds in the next few years.

Cheah said the group will be spending about RM2 billion in capital expenditure in total over the next four to five years, with the investment from GIC to cover about 40% of the amount.

He added apart from that, the investment will also be used to repay some of its outstanding loans.

Sunway Healthcare’s MD Lau Beng Long said the participation of GIC augurs well to support the expansion of our existing hospitals and the setting up of new hospitals and ancillary healthcare businesses across the country.

“We look forward to tapping and learning from GIC’s regional healthcare knowledge and experience to further elevate our healthcare services in Malaysia,” he added.

In a separate statement, GIC CIO of private equity Choo Yong Cheen said the fund is pleased to support the future growth of Sunway Healthcare.

“We are confident in the longterm growth potential of the company given its award-winning operating track record and focus on providing state-of-the-art medical infrastructure,” he said.

At close yesterday, Sunway’s shares ended four sen or 2.3% higher at RM1.78, valuing the company at RM8.78 billion.