Singapore sovereign wealth fund GIC Pte Ltd acquired a 16% stake in Sunway Healthcare Holdings Pte Ltd (SHH) for RM750 million. In a statement on Wednesday, Sunway Co., Ltd. Announced that Greenwood Capital Pte Ltd, an indirect arm of GIC Ventures, has signed a share purchase agreement to acquire Sunway Healthcare Pte Ltd’s interests.
Greenwood acquired shares of Sunway City Sdn Bhd, a subsidiary of Sunway, for a total subscription of RM750,000. The proposed investment includes the issuance of Sunway Healthcare and Greenwood’s. Subscription of 100 million shares of Sunway Healthcare, accounting for 8.24% of Sunway Healthcare shares.
The investment includes “10 million non-repayable convertible preferred shares (ICPS, selected by Greenwood, at 94.22 million). Sunway Healthcare shares, accounting for 7.76% of Sunway Healthcare shares. Accumulatively convertible non-refundable dividend preferred shares (DCPS) can be converted into Sunway Healthcare shares. Sunway announced that they will jointly provide Greenwood with a 16% stake in Sunway Healthcare. Based on a complete conversion in exchange for an investment of RM 750,000, which is equivalent to a capital cost of RM 4.68 billion.
“Since Sunway Medical is expected to generate stable cash flow and additional investment. The company has agreed to pay the subscription amount in five installments,” he said. Sunway stated that subscription cost is used in the expansion of existing hospitals. Institutions include Sunway Medical Center, Selangor, and Sunway Medical Center, Kuala Lumpur.
It has also been used to build new medical facilities, namely: Sunway Braun Jaya Medical Center in Penang, Sunway Damansara Medical Center, Selangor, Sunway Ipoh Medical Center, Perak. The Sunway Kotabah Lu Medical Center, Kelantan, Sunway Iskandar Medical Center, Johor, and Sunway Rehabilitation Hospital Paya Terubong, Penang. These funds will also be used for working capital purposes including but not limited to daily management and operating expenses provided by Sunway health care Group.
In support, Sunway stated that Greenwood’s investment will enable Sunway Healthcare Group to accelerate its expansion plans. By prudently managing the financial risk profile of Sunway healthcare Group and Sunway Group.
In addition, the planned investment provides external verification by experienced healthcare investors for Sunway Healthcare Group’s expansion plans. “The planned investment is in line with Sunway Group’s strategic direction. Under which Sunway Group Healthcare will expand the production capacity of Sunway’s flagship medical centre in Sunway City, Selangor, and Sunway Velocity Medical Center in Kuala Lumpur. As part of its comprehensive development, it has started to expand, and six more hospitals will be built in Malaysia in the next few years,” it said.
Sunway said that the proposed Sunway healthcare Group also intends to expand into other health-related fields. Such as home care, nursing homes, telemedicine centres, traditional and complementary medical centres. Sunway added these funds will be used to fund investment and working capital needs while reducing reliance on debt financing. The proposed investment also provides an opportunity for Sunway Group to include Greenwood a subsidiary of Singapore’s sovereign wealth fund and long-term global investor GIC Private Limited.
“As a business partner, Greenwood will work with Sunway to enhance the operation of the proposed Sunway healthcare Group. And strengthen Sunway’s position in the private healthcare sector in Malaysia,” it said.