Khazanah Nasional Berhad today announced that it is selling Prince Court Medical Centre (PCMC) in Kuala Lumpur for RM1.02 billion in cash.
Its wholly-owned indirect subsidiary, Pulau Memutik Ventures Sdn Bhd, today signed a conditional agreement to sell Prince Court to IHH’s indirect unit Pantai Holdings Sdn Bhd.
“Given the recent change in Khazanah’s refreshed mandate, the decision was made to sell PCMC to IHH, Khazanah’s healthcare platform,” the sovereign wealth fund said in a statement today.
Khazanah is IHH’s second-largest shareholder after Mitsui & Co Ltd, with just over a 26% stake held through Pulau Memutik Ventures.
The fund made the strategic acquisition of PCMC in 2018 with the view of building up the healthcare services sector in Malaysia and promoting Kuala Lumpur as a destination of choice for quality healthcare in the region.
Khazanah said the proposed divestment would enable PCMC to fully benefit from being integrated into IHH’s Malaysian operations and its broader global network.
Khazanah managing director Shahril Ridza Ridzuan said it would also provide the fund with the liquidity for future investment capital requirements.
“In addition, Khazanah is confident that PCMC will further benefit from IHH’s wealth of experience in providing premium healthcare while solidifying IHH’s position as a leading Malaysian healthcare operator, where we remain as a substantial shareholder with a 26.04% stake,” he said.
Shahril said the proposed divestment would strengthen IHH’s overall position in the domestic healthcare services market, with Khazanah’s continued contributions through its involvement in IHH.
The proposed divestment is subject to the approvals of the relevant authorities, including the Health Ministry and the Economic Planning Unit, and the non-interested shareholders of IHH, among others.
Khazanah said the transaction was expected to be completed in the first quarter of 2020.
Late last year, Khazanah sold a 16% stake in IHH to Japan’s Mitsui & Co Ltd for RM8.42 billion.
The sale saw Mitsui become IHH’s largest shareholder with a stake of almost 33%. Khazanah’s stake was reduced to 26% following the sale.
PCMC is a 277-bed private healthcare facility at the intersection of Jalan Tun Razak, Jalan Bukit Bintang and Jalan Kia Peng, Kuala Lumpur.
In a filing with Bursa Malaysia today, IHH said PCMC recorded a profit after tax of RM51.0 million for the financial year ended Dec 31, 2018, while its net assets stood at RM486.1 million as at Dec 31, 2018.
Khazanah’s original investment in the hospital was RM1.086 billion.
Petronas had been suffering annual losses when Khazanah acquired the hospital, which has been described as offering “luxurious rooms more akin to hotel suites”, last year.