KHAZANAH Nasional Bhd  (Khazanah) has entered into an agreement with Mitsui & Co Ltd. (Mitsui) of Japan, to divest 16%, or 1,403,087,400 shares, in IHH Healthcare Bhd (IHH), at RM6.00 per share, for RM8.42 billion.

Following the divestment, Khazanah’s shareholding in IHH will decrease to 26.05%.

This is based on the enlarged share capital of IHH after the company completed the acquisition of an additional 30% equity interest in Acibadem Saglik Yatirimlari Holding A.S. 

IHH announced the Acibadem acquisition on October 8.

The transaction with Mitsui, which forms an important part of Kazanah’s portfolio restructuring, was subject to regulatory approvals and the completion of the Acibadem acquisition.  

Proceeds raised from the divestment will be used for new investments and capital requirements. 

Khazanah said it will continue to be a significant shareholder with representation on the board of IHH and, provide stability to the shareholder base of IHH in the foreseeable future.

“The transaction clearly shows Mitsui’s confidence in the growth of the IHH platform.

“Khazanah remains committed to supporting the group and looks forward to the future success of IHH.

“The divestment is part of Khazanah’s strategy to grow the businesses that we are invested in and to find the appropriate time and value to create liquidity for our future capital and investment needs,” Khazanah managing director Shahril Ridza Ridzuan said.

Khazanah anticipated the transaction to be completed by the first quarter of 2019.

Mitsui’s acquisition of the 16% equity interest in IHH will make the Japanese company the largest shareholder in  Asia’s largest private hospital group, with a 32.9% stake.

IHH operates 50 hospitals with more than 12,000 beds in nine countries, including Malaysia, Singapore, Turkey and India.

Mitsui, which has been investing in IHH since 2011, said it has supported the group’s geographical and business expansion by introducing local partners and advanced healthcare-related services from developed countries.

“During the six-year period from 2011, both IHH’s Ebitda (earnings before interest, tax, depreciation and amortisation) and the number of hospital beds recorded more than a threefold increase.

“Leveraging its comprehensive strengths, Mitsui will continue to support IHH’s management,” said the firm in a statement.

“Mitsui will contribute to further developing healthcare services in Asia, in terms of access, quality and efficiency, and contribute to creating a healthy society.”

It added that the acquisition is subject to and conditional upon regulatory requirements in India.

“We believe that the financial impact of the additional share acquisition to the fiscal year ending March 2019 should be limited.” – Bernama, November 29, 2018.